Bitcoin suffered a significant price drop of 8.4% on April 13, falling from around $67,000 to $61,625. The sudden decline coincided with news of Iran launching an attack on Israel, contributing to the rise in geopolitical tensions across the Middle East. Consequently, the digital currency’s market capitalization saw a wipe-out of over $130 million in a matter of minutes.

The plunge hasn’t been limited to Bitcoin; the whole cryptocurrency sector felt its effects. Ethereum, the second-largest cryptocurrency by market cap, descended by almost 9.81% to $2,927. Similarly, Solana fell by nearly 5.96% to $129. The global crypto market in total saw an 8.19% drop to $2.23 trillion in capitalization as per CoinMarketCap’s data.

The trigger for this wave of cryptographic currency sell-offs was Iran’s drone attack on Israel on April 13. This was a violent response following an earlier attack by Israel on a diplomatic facility in Damascus, Syria that inflicted casualties on seven Iranians, including two high-ranking generals. Iran has also reportedly taken control of a cargo vessel belonging to an Israeli billionaire amidst the escalating tension.

U.S. President Joe Biden, on April 12, cautioned about potential retaliatory attacks by Iran, reiterating America’s commitment to Israel’s defense and their readiness to intervene. He remarked, “We are devoted to the defense of Israel. We will support Israel, we will help defend Israel, and Iran will not succeed.”

However, the looming conflict and increased tensions have left American officials frustrated due to Israel’s lack of advance information regarding their airstrike in Damascus. Israeli authorities had reportedly informed U.S. officials of their airstrike when their aircraft were already inbound for Syria. This intensifying situation further complicates the efforts to calm the Middle East region since the Oct. 7, 2023, attacks by Hamas sparked an ongoing conflict between Israel and the militant group.