From Bitcoin to bonds: How the Iran conflict is reshaping investment strategies

From Bitcoin to bonds: How the Iran conflict is reshaping investment strategies

The recent US military strikes on Iranian nuclear facilities, announced by President Donald Trump on Saturday, have thrust the ongoing Iran-Israel conflict into a new and dangerous phase, sending ripples of uncertainty through global markets. Investors, already grappling with mixed signals from US stock performance and upcoming economic indicators, are now forced to weigh the potential fallout of this unprecedented escalation.

In my view, this moment represents a critical juncture—not just for financial markets, but for the broader trajectory of global stability and economic health. Below, I’ll unpack the myriad factors at play, offering a detailed exploration of how these developments are shaping the world as we know it.

The geopolitical powder keg: US strikes and Iran’s retaliation

The announcement that the United States had directly entered the Iran-Israel conflict by launching attacks on three Iranian nuclear sites—Fordo, Natanz, and Isfahan—caught markets and analysts off guard. This operation, executed in coordination with Israel and involving over 125 aircraft and bunker-buster munitions, marks a significant departure from the US’s previous role as a diplomatic and indirect supporter in this regional standoff.

These strikes targeted key components of Iran’s nuclear program, a move that signals a bold escalation aimed at curbing Tehran’s nuclear ambitions. The immediate aftermath has been anything but reassuring. Iran responded swiftly with missile and drone attacks on Israeli cities, coupled with threats to target US military bases in the Gulf. This tit-for-tat retaliation has heightened fears of a broader conflict that could engulf the Middle East, a region already fraught with tension.

This escalation is a double-edged sword. On one hand, the US and Israel may view it as a necessary step to deter Iran’s nuclear progress, potentially stabilising the region in the long term by weakening a perceived threat. On the other hand, the immediate risk of miscalculation or overreaction could plunge the region—and by extension, the global economy—into chaos.

The Middle East is a linchpin for global oil markets, and any disruption here could send shockwaves far beyond its borders. As an observer, I can’t help but feel a sense of unease about how delicately balanced this situation is and how quickly it could spiral out of control depending on Iran’s next move.

Market reactions: A mixed bag of caution and resilience

The financial markets have responded to these developments with a blend of caution and measured resilience, reflecting the uncertainty that defines this moment. On Friday, before the US strikes were announced, US stock markets closed with mixed results: the Dow Jones Industrial Average eked out a modest gain of 0.08 per cent, while the S&P 500 and Nasdaq Composite slipped by 0.22 per cent and 0.51 per cent, respectively.

This uneven performance hints at investor hesitation even before the weekend’s bombshell news. By Monday, as the new trading week began, Asian equities opened lower, and US equity index futures pointed to a downward start for Wall Street, suggesting that the geopolitical shock is starting to weigh more heavily on global risk sentiment.

What strikes me here is the flight to safety that’s becoming evident in other asset classes. US Treasury yields, for instance, were mostly lower on Friday, with the 10-year yield dipping to 4.37 per cent and the 2-year yield falling to 3.90 per cent. This decline in yields—a drop of more than 1 basis point for the 10-year and over three basis points for the two-year—signals that investors are piling into government bonds, traditionally seen as a safe haven during times of uncertainty.

Gold, another classic refuge, held steady at US$3,368.68 per ounce, showing little movement, while Brent crude oil unexpectedly fell by 2.33 per cent to US$77.01 per barrel. The muted reaction in oil prices surprised me, given the Middle East’s critical role in global energy supplies. It suggests that, for now, investors aren’t pricing in a significant disruption, but that could change in an instant if the conflict intensifies.

Cryptocurrencies: A barometer of risk appetite

The cryptocurrency market, often a bellwether for risk appetite, has not been immune to the turbulence. Bitcoin, the world’s largest cryptocurrency by market value, took a sharp dive on Sunday, dropping 4.13 per cent to US$99,237 by mid-morning Eastern Time. Ether, the second-largest, fared even worse, plummeting 8.52 per cent to US$2,199. This sell-off sent Bitcoin below the psychological US$100,000 support level, a threshold that traders watch closely.

Popular trader Cas Abbe, in a post on X, warned that Bitcoin could slide further to the US$93,000–US$94,000 range before finding a bottom. The weakness didn’t stop with Bitcoin; it dragged other major altcoins, such as ETH, XRP, SOL, and HYPE, below their respective support levels, signalling a broader souring of sentiment in the cryptocurrency space.

Yet, there’s a glimmer of hope—or perhaps speculative optimism-in Bitcoin’s late-Sunday recovery, as it climbed back above US$101,000. To me, this rebound, alongside the modest moves in gold and subdued reactions in oil and equity futures, hints that some traders are betting on a contained conflict rather than a sustained geopolitical crisis.

Still, the volatility in cryptocurrencies underscores a broader risk-off mood. As someone who has closely followed these markets, I see this as a reflection of how intertwined digital assets have become with global events—once seen as a fringe phenomenon, they’re now a real-time gauge of investor sentiment.

Economic data: The next piece of the puzzle

Amid this geopolitical maelstrom, the US economic calendar is poised to deliver critical data that could either calm or inflame market jitters. Tonight, we’ll see the preliminary S&P Global US PMI readings for June, which measure the health of the manufacturing and service sectors, alongside existing home sales data for May, a key indicator of consumer confidence and the vitality of the housing market.

A strong PMI could signal that the US economy is holding up despite external pressures, potentially buoying investor confidence. Conversely, a weak reading might stoke fears of a slowdown, amplifying the uncertainty already swirling around the Iran-Israel conflict.

The housing data, meanwhile, offers a window into how American consumers are faring. A drop in existing home sales could suggest that high interest rates and economic uncertainty are eroding confidence, while a robust figure might counterbalance some of the geopolitical gloom.

Personally, I’m inclined to think these numbers will be pivotal—not just for markets, but for the Federal Reserve’s next moves, which I’ll explore shortly. In a world where every data point is scrutinised, tonight’s releases feel like a potential tipping point.

The Fed’s delicate dance: Rates, inflation, and oil

Speaking of the Federal Reserve, Fed Governor Christopher Waller’s recent comments have added another layer to this intricate narrative. On Friday, he noted that inflation was softening to a level where the Fed could contemplate cutting interest rates at its July meeting.

This dovish tilt sent US Treasury yields lower and contributed to a 0.20 per cent decline in the US Dollar Index to 98.71. For me, Waller’s remarks are a ray of light in an otherwise stormy outlook—lower rates could stimulate an economy facing headwinds from tariffs and now geopolitical risks. But here’s the catch: the Iran-Israel conflict could upend this calculus.

If the conflict disrupts oil supplies—say, through Iranian retaliation targeting Gulf infrastructure or the Strait of Hormuz—oil prices could surge. Analysts from JPMorgan have cautioned that an all-out conflict might push oil above US$100 per barrel, a level not seen since 2022.

Higher energy costs would act like a tax on consumers and businesses, potentially reigniting inflation just as the Fed hopes to tame it. In my view, this puts the Fed in a bind: cut rates to support growth and risk fueling inflation, or hold steady and risk choking an economy already under strain. It’s a tightrope walk, and the geopolitical wild card makes it all the more precarious.

The bigger picture: Global economic risks and opportunities

Zooming out, the implications of this conflict extend far beyond immediate market swings. The Middle East accounts for a substantial portion of global oil production, and any prolonged disruption could significantly impact economies that rely heavily on energy imports.

Higher oil prices would squeeze consumer spending, slow economic growth, and possibly tip the world into a stagflationary spiral, characterised by stagnant growth paired with rising prices. For the US, already navigating Trump’s tariff-driven economic policies, this could compound existing challenges, creating a perfect storm of inflationary pressures and reduced demand.

Yet, there’s a flip side. If the conflict de-escalates, perhaps through diplomatic breakthroughs or a mutual stand-down, markets could stabilise, and attention might shift back to economic fundamentals. A contained outcome could even spur long-term shifts, such as accelerated investments in renewable energy or alternative oil sources, thereby reducing dependence on the volatile Middle East.

I see both peril and potential here: the risk of a downturn is real, but so is the chance for resilience and adaptation if cooler heads prevail.

My take: A call for vigilance

In my opinion, we’re at a crossroads where vigilance is paramount. The US strikes on Iran have upped the ante, and while markets haven’t yet priced in a worst-case scenario, the potential for escalation looms large. Investors should keep a close eye on Iran’s response, tonight’s economic data, and the Fed’s July meeting.

For now, the flight to safety, into Treasuries and, to a lesser extent, gold, makes sense, but the muted oil reaction and Bitcoin’s partial recovery suggest a fragile hope that this won’t spiral out of control.

Personally, I’m torn. Part of me fears the domino effect of a broader conflict: higher oil prices, stalled growth, and a Fed with its hands tied. Another part wonders if this could be a catalyst for overdue shifts in global energy and geopolitical strategies.

Either way, the stakes are sky-high, and the coming days will tell us much about where this road leads. For investors and ordinary folks alike, staying informed and agile is the best defence against a world that feels increasingly unpredictable.

 

Source: https://e27.co/from-bitcoin-to-bonds-how-the-iran-conflict-is-reshaping-investment-strategies-20250623/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Israel-Palestine crisis: Navigating the intersection of conflict, aid and blockchain

Israel-Palestine crisis: Navigating the intersection of conflict, aid and blockchain

Top blockchain and crypto news: Gaza tensions, digital tremors, NFTs are not dancing in September, Joe Lubin talks traditional system’s twilight.

In this issue

  1. Gaza tensions, digital tremors
  2. NFTs: not dancing in September
  3. Lubin talks twilight: Traditional system’s eclipse

From the Editor’s Desk

Dear Reader,

It’s a geopolitical conflict with roots stretching back over more than a century. Yet the latest escalation of violence in Israel and Palestine this past week feels particularly shocking. Not least because the Hamas-led attacks throughout Israel over the weekend apparently caught the Israeli government, intelligence services and military — one of the world’s most well-provisioned — completely off-guard.

Reports have emerged suggesting that the militant group Hamas, the de facto political leadership in the Palestinian region of Gaza, used crypto transfers to raise millions of dollars in funds for the weekend’s attacks. It therefore appears we have once again seen financial access weaponized, as it always is in modern day conflict.

The hope now is that crypto steps up to take on a more positive role in what happens next. The blockchain, after all, is advertised as stateless, and permissionless. In its truest guise, it bypasses politics. It could be used here to get much needed humanitarian aid to civilians on both sides of this bloody conflict.

Local Web3 entrepreneurs set up an emergency crypto fund for Israeli victims of the violence — a move that we applaud and recommend readers seek out. But there are also more than 2 million Palestinian civilians inside Gaza who could benefit from financial aid delivered in the form of crypto.

As we have seen in this abhorrent incursion, civilians have cruelly been included in the attack equation. From afar, the complex web of history, politics, and homeland intertwine. On the ground, there are simply lives at stake.

Until the next time,

Angie Lau,
Founder and Editor-in-Chief
Forkast.News


1. Crisis? Bitcoin’s dual response

Israel’s cyber crimes unit, in conjunction with the National Headquarters for Economic Warfare, has announced the freezing of cryptocurrency accounts believed to be instrumental in raising funds for the Gaza-based Palestinian militant group, Hamas.

  • Israeli authorities have reportedly urged Binance, the world’s largest crypto exchange, to transfer the confiscated funds into Israel’s state treasury.
  • That follows a devastating series of attacks on Israel by Hamas over the weekend. The attacks, which included multiple atrocities against civilians, killed an estimated 1,200 people and wounded at least 2,700 others as of noon Thursday in Hong Kong.
  • In retaliation, Israeli warplanes have bombarded Gaza, a tiny strip of land some 40 km in length and home to over 2 million people. The air strikes have reduced large parts of the area to rubble, with 900 people reported killed and 4,500 injured. Reports indicate that the Israeli military has called up 350,000 reservists and may now be preparing for a ground assault on Gaza.
  • In response to this humanitarian crisis, a consortium of Israeli crypto companies has launched Crypto Aid Israel. This emergency fund aims to support Israeli citizens affected by the ongoing conflict. It is spearheaded by local crypto industry figures and companies such as Fireblocks, 42Studio, Market Across and CryptoJungle. They have teamed up with non-profit organizations to receive and deliver humanitarian aid to affected Israeli communities using cryptocurrencies such as Bitcoin, Ether and stablecoins like USDT and USDC.
  • Crypto has been used in conflict before. On-chain data shows that combatants and civilians on both sides of the Russo-Ukrainian war make use of cryptocurrencies as a way to receive and send funds. The use of crypto on both sides of the divide reveals crypto’s dual-edged nature as a tool designed to increase financial access, regardless of political affiliation, location, or intended use.
  • Six months into the conflict with Russia, Ukraine had already raised US$54 million in crypto donations, channeling it towards the provision of military essentials, medicine, and vehicles for their armed forces. On the flip side of that, pro-Russia militias also received over US$20 million in cryptocurrencies in the first year of the conflict.

Forkast.Insights | What does it mean?

The Middle East, as a pivotal hub for global oil production and transit, has long been a focal point of geopolitical tension reverberating through the global economy. When conflicts arise in the region, the immediate concern for markets is often the threat to oil supply chains. Physical infrastructure can be damaged, while fear of wider escalation stokes market uncertainties. Locations like the Suez Canal and the Strait of Hormuz become choke points for global oil supply.

However, the market impact is felt beyond the oil sector. Rising oil prices lead to higher transportation and production costs. As these costs surge, consumers feel the pinch, leading to inflationary pressures. Central banks, in a bid to stabilize economies, adjust monetary policies, which in turn further fuel inflation.

In the midst of these economic fluctuations, investors begin to search for stability. Historically, this stability was sought in gold, a time-tested “safe haven.” However, the digital age has ushered in another contender: Bitcoin.

Dubbed “digital gold” by some, Bitcoin offers certain features that make it attractive in times of uncertainty. Its capped supply makes it a potential hedge against fiat currency depreciation, especially at times of high inflation. Additionally, in regions with limited banking, the decentralized nature of Bitcoin can offer an alternative means of accessing financial services.

But Bitcoin’s journey amid geopolitical unrest is not a straightforward one. While some investors view it as a refuge, others might liquidate volatile assets like cryptocurrencies to cover losses or rebalance portfolios. This duality in investor sentiment can lead to sharp, unpredictable price movements in the Bitcoin market. On top of that, as Bitcoin’s ecosystem intertwines with the broader economy, significant spikes in global oil prices could impact the energy-intensive process of Bitcoin mining, affecting its network dynamics.


2. Wake me up when September ends

The NFT production on Ethereum reached an all-time low of US$17.55 million in September, marking a 12.4% decline from August’s US$20.05 million, according to data from Forkast Labs.

  • Prestigious NFT collections like Bored Ape Yacht Club and CryptoPunks saw a significant drop in their valuation, pointing to a potential shift in the broader market sentiment.
  • Forkast ETH NFT Composite, an index tracking the top 250 NFTs on Ethereum, plunged 48% year-to-date, hitting its low of 715.22 points in September.
  • Polygon’s NFT production experienced a dip, with September’s figures at a seven-month low of US$4.7 million. That was, nonetheless, an overall year-to-date increase of 219%.
  • Anndy Lian, NFT author, suggests the NFT hype from 2021 has tapered off, leading to a selective and realistic approach from buyers.
  • Major NFT marketplaces like OpenSea and Blur reported drops in monthly trading volumes by 31.8% and 38.3% respectively in September.
  • While the market faces challenges, global brands like Starbucks are still adopting NFTs, showcasing new innovative use cases that could reignite interest in the sector.

Forkast.Insights | What does it mean?

There has been a fundamental shift in the way NFT investors collect and trade. They’re finally looking for real value.

Where they aren’t finding value is in new mints, currently at all-time low NFT production levels. Those new NFT mints typically represent run of the mill profile picture collections, which can make creators enormous profits in an instant during a bull market. Today, you’ll be lucky to flip a new mint for what you paid.

After major projects like the CyberKongz’ Genkai, and NWay’s Wreck League failed to sell out their primary sale over the summer, creators hit the brakes on minting new collections.

Still, even with declining primary sales and plummeting value for NFTs on secondary markets, some NFT collections are proving resilient even today. Those collections offer more tangible value, like the Pudgy Penguins NFTs who offer royalties on toy sales to select NFT holders.

Similarly, the Winds of Yawanawa collection by Refik Anadol offers a more abstract, but equally attractive value as pure art. Refik’s art has been featured both on the Las Vegas Sphere, and now in the Museum of Modern Art as the first NFT creator to have his NFT backed digital art welcomed into their collection.

Even more value has been uncovered in new SoFi (social finance) platforms, which have themselves been a main contributor to the decline of the NFT markets. Total new users of the new Friend.tech platform have climbed to over 299,000 unique users, up from 130,000 on Sept. 1. Total locked value in the platform also rose from around 3,260 ETH to approximately 29,200 ETH over the month of September.

Innovation is for now mostly coming from outside NFTs. Until it returns to the non-fungible token market, expect to see September’s trend of all-time-low sales to continue well into October and beyond.


3. Monetary system’s impending sunset

Joe Lubin, chief executive of blockchain technology platform Consensys and a co-founder of Ethereum, spoke to Forkast during the recent Token2049 conference in Singapore. He discussed the parallels between today’s crypto bear market and the dotcom bubble of the late ’90s. Lubin attributes the current crypto downturn to similar waves of unbridled enthusiasm followed by market corrections. He predicted that a marriage between AI and blockchain could be the crypto industry’s route back to prominence.

  • Amid escalating global financial challenges, such as inflation and interest rate hikes, Lubin said that traditional monetary systems might be approaching their twilight.
  • Regulators in the U.S. are scrutinizing the crypto industry. Lubin sees this as a veiled effort to either “slow-roll” or outright suppress the budding industry.
  • Looking abroad, regions like Europe, Asia, and the Middle East are painting a contrasting picture. Those regions, he said, see decentralized tech as an equalizing force against the might of U.S. financial power.
  • A tech marriage is on the horizon, Lubin said. He highlighted the importance of weaving artificial intelligence into the fabric of blockchain technology — and vice versa.
  • There’s no need for society to be overly concerned about artificial intelligence, according to Lubin. He remains buoyant about AI’s potential, particularly in collaboration with decentralized protocols that prevent the concentration of AI control in a small number of hands.

Forkast.Insights | What does it mean?

Lubin is no AI doomer. He made that clear during his interview with Forkast. But while the blockchain mogul and Ethereum godparent outlined a lot of the good that can come from AI’s impending global takeover, he touched on some of its more dystopian aspects also.

Tech is never inherently bad, was the primary thrust of Lubin’s argument on artificial intelligence. The Consensys boss should know. He graduated from Princeton with a degree in computing and electrical science before kicking off his working life in the university’s robotics lab. So he enjoys a pretty solid grasp on the nascent field.

The only danger of artificial intelligence, he said, is if those now working on it allow its power to become entirely concentrated in a small number of hands — the bevy of private companies driving much of today’s AI advances. That would be “failure mode for humanity,” he said, without so much as a flinch.

The remedy for that, Lubin argued, is open source building and the incorporation of decentralized blockchain protocols. That way, the capabilities explored on the back of large language models (LLMs), generative pretrained transformers (GPTs) and the like will remain visible for all to see and make use of.

Your next open source coding tutor? Look no further than AI.

“We need to level up humanity in a big way,” Lubin said. “Our AI allies are going to get better and better at that.”

 

 

Source: https://forkast.news/israel-palestine-navigating-conflict-aid-blockchain/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j