For the global cryptocurrency industry, geopolitical factors will become the absolute main line of the short-term market, and risk aversion sentiment will greatly influence the trend of cryptocurrencies.
Written by: Tuo Luo Finance
In the past two weeks, the world's attention has been focused on the Middle East.
As the two most important powers in the Middle East, the conflict between Iran and Israel not only signifies a sudden break in the surface peace of the region and a continuous escalation of chaos but also further stirs up global turmoil. Currently, this war triggered by nuclear issues has not only deeply involved Iran and Israel but has also compelled the United States to intervene rapidly, leading to an expanding situation.
Amid risk aversion sentiment, global markets are in turmoil, with hard assets like gold and the US dollar rising rapidly, while risk markets are in a state of alarm. It must be acknowledged that the flames of war between Iran and Israel are also spreading into the cryptocurrency sector.
To discuss the current conflict between Iran and Israel, one cannot avoid the Iranian nuclear issue. In fact, Iran's nuclear program began earlier than expected. As early as 1957, during the Cold War, to prevent Soviet influence from penetrating southward, the United States signed the "Civil Nuclear Cooperation Agreement" with the pro-American Pahlavi dynasty of Iran, marking the beginning of Iran's nuclear program.
In 1967, according to the agreement, the United States provided Iran with a 5-megawatt research nuclear reactor, which was installed at Tehran University. In 1968, Iran signed the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), formally establishing its legitimate status for the peaceful use of nuclear energy within the international non-proliferation framework. The oil crisis of the 1970s further catalyzed Iran's nuclear industry, and relying on high-yield oil exports, Iran established the Atomic Energy Organization of Iran (AEOI) in 1974, beginning nuclear technology cooperation with countries around the world. By 1979, with the construction of two reactors at the Bushehr nuclear power plant reaching about 80% completion, Iran had initially established a relatively comprehensive nuclear industrial system.
The turning point occurred during the Iranian Islamic Revolution. After the revolution, Iran shifted from a secular monarchy to a theocratic state, marking the end of the honeymoon period between the United States and Iran. The Khomeini regime was fully anti-American, and the United States designated Iran as a blockade zone, while the nuclear program, as a symbolic product of US-Iran cooperation, fell into silence. After the Iran-Iraq War, Khomeini recognized the importance of a modern military system and began to seek support from the Soviet Union and other countries, signing the "Peaceful Use of Nuclear Energy Agreement" with Russia in 1992, leading to high-intensity cooperation between the two.
Since the Iranian nuclear issue was first exposed to the international community in 2002, Iran has engaged in multiple rounds of multilateral negotiations with other countries over the following years. In 2015, Iran signed the Joint Comprehensive Plan of Action (JCPOA) with the US, UK, France, Germany, Russia, and China, temporarily freezing its uranium enrichment activities, and Western sanctions were subsequently eased. However, the situation became murky again with the rise of Trump, as the US unilaterally withdrew from the agreement in 2018 and reimposed severe sanctions. In response, Iran adopted a more proactive strategy in its nuclear industry and successfully deployed IR-6 centrifuges in 2023, achieving a fivefold increase in enrichment efficiency compared to the agreement period. According to the latest data from 2025, the International Atomic Energy Agency (IAEA) reported that Iran has accumulated 408 kilograms of 60% enriched uranium, nearing the threshold for weapon-grade nuclear material.
In April of this year, the Trump administration announced it would restart nuclear negotiations, but in early June, on June 12, 2025, the IAEA board officially determined that Iran had not complied with its nuclear obligations, leading to a breakdown in negotiations and a rapid deterioration of the situation in the Middle East. In this context, Israel has become the most restless country.
The conflict between Israel and Iran has a long history, with the absolute ideological opposition of religious beliefs determining the unavoidable confrontational backdrop between the two. The struggle for geopolitical dominance has further escalated this conflict. On one hand, Iran is building a Shiite arc to encircle Israel, while on the other hand, it is ramping up its nuclear technology. In the face of survival anxiety, Israel is retaliating fiercely, with the tacit support of the United States emboldening its actions. The confrontation between Israel and Iran is evident in various aspects, and their proxy wars have become a fundamental aspect of the Middle Eastern situation in recent years. However, this time, the proxy war that was buried in the shadows has rapidly transformed into a direct confrontation.
On June 13, local time, the Israeli Air Force launched open airstrikes on dozens of nuclear facilities and military targets within Iran, codenamed "Lion's Strength." Iran, unwilling to back down, launched a series of missile and drone attacks against Israel. Subsequently, Israel and Iran continuously escalated their attacks on each other, drawing in the international community. In fact, looking back at the timeline of the Israel-Iran conflict, the United States can be seen as the instigator. Due to the profound contradictions between the US and Iran over geopolitical, ideological, historical grievances, and regional hotspot issues, the US chose to support Israel in curbing Iran's development. In this conflict, the US publicly proclaimed peace negotiations and non-intervention while simultaneously commanding the US military to destroy three Iranian nuclear facilities on June 21, further increasing the likelihood of an escalation in conflict and significantly complicating the situation, thereby threatening global security.
Geopolitics is indeed the core focus of the global financial market, and the impact of the US's involvement continues to amplify. In response to this move by the US, Iran proposed to close the Strait of Hormuz, which handles about one-third of global maritime oil trade, triggering global panic. Today, international crude oil futures opened up more than 5%, and international gold prices briefly surpassed $3,400.
The risk market is not faring well. As risk aversion sentiment intensifies, the three major US stock index futures opened lower, and the cryptocurrency market was severely impacted. Over the past three days, the cryptocurrency market has continuously declined, with Bitcoin dropping below the $100,000 mark, reaching a low of $98,000, and currently reported at $101,961. The altcoin sector has plummeted, with ETH returning above $2,200 and SOL again reaching $130. Coinglass shows that as of 9 AM this morning, approximately $559 million in liquidations occurred across the network in the past 12 hours, with long positions liquidating $452 million and short positions liquidating $107 million. Among them, Bitcoin liquidations amounted to $223 million, and Ethereum liquidations totaled $156 million.
On the other hand, the flames of war between Israel and Iran, in addition to igniting risk aversion sentiment in the cryptocurrency market, are also rapidly spreading to the domestic cryptocurrency industry. On the afternoon of June 18, a mysterious hacker group called Gonjeshke Darande claimed to have launched a large-scale attack on the Iranian cryptocurrency exchange Nobitex, successfully obtaining its source code, internal network data, and customer asset data. To date, nearly $90 million in cryptocurrency assets have been affected, most of which are stablecoins like USDT. Notably, even though the exchange was compromised, on-chain data indicates that most of the funds were not transferred but were directly destroyed, making this act seem more like a demonstration.
The hackers explicitly stated their reasons for the attack, claiming that "Nobitex is at the core of the Iranian regime's funding of global terrorism, and cooperating with the Iranian regime's infrastructure that funds terrorism and violates sanctions puts your assets at risk." Although the hacker group has never revealed its identity, many experts in the industry believe it is associated with Israel's military intelligence unit, the famous 8200 unit, given its precise strikes against Iran since 2022.
It must be acknowledged that the hackers' attacks are indeed precise, effectively obstructing the flow of funds between Iran and the outside world. Due to years of suffering from sanctions and inflation, Iran's local cryptocurrency industry has developed quite rapidly. According to data provided by Maria Noor, there are currently 90 cryptocurrency exchanges operating in Iran, with over 10 functioning as centralized exchanges, providing websites and applications for users. Approximately 15 to 19 million Iranians are active in the cryptocurrency market, accounting for about one-fifth of Iran's total population. It is evident that the cryptocurrency market has become one of the important channels for Iran to conduct transactions with the outside world.
Nobitex, which was attacked, is the largest exchange in Iran, with 6 million active users and an annual trading volume of up to 68 million transactions, holding nearly 87% market share. Reuters has previously reported on this project, stating that the vast majority of domestic cryptocurrency trading in Iran is conducted through Nobitex or similar exchanges connected to the international market.
In addition to cryptocurrencies, the Iranian government has also invested in the industrial application of blockchain technology, having launched official blockchain projects Kuknos and Borna to promote the improvement and efficiency of financial infrastructure. Although supportive of blockchain technology, the Iranian government's attitude towards the continuous development of cryptocurrencies locally is quite nuanced.
Firstly, in the field of mining, Iran's stance is very ambiguous. Unlike other regions where mining is dominated by large operations, Iran's mining industry is led by individual miners. In 2018, Iran attracted a wide range of miners by legalizing the mining industry, quickly becoming a popular destination for mining globally. Given the demand for trading, local individual mining is not uncommon. However, problems soon arose. Due to insufficient power infrastructure, Iran frequently faces challenges related to power shortages. Data supports this point, as about 300 mining projects have received government approval, but according to data cited by Wu from ViraMiner's CEO Masih Alavi, the legal mining scale in Iran has only reached 5 megawatts, while the underground scale of illegal mining is close to 2GW, which is 400 times that of legal mining. This power consumption accounts for about 5% of Iran's total electricity consumption in 2023. Against this backdrop, Iran has imposed stricter restrictions and contractions on this industry. In 2020, the Central Bank of Iran announced a ban on the use of illegally mined currencies for domestic transactions, and in December 2024, the government explicitly prohibited the promotion of cryptocurrency mining machines. To date, although the government has not taken further action, its attitude is clearly not supportive.
The negative attitude is even more pronounced in the realm of cryptocurrency trading. In response to the erosion of official currency sovereignty by cryptocurrencies, Iran has taken strong measures, repeatedly attempting to block exchanges between cryptocurrencies and the rial, and restricting the outflow of domestic funds. Earlier this year, the Central Bank of Iran temporarily halted all rial payments for cryptocurrency exchanges, requiring all exchanges to use government-designated interfaces for transactions to achieve fund tracking and user monitoring. In the following February, Iran explicitly prohibited any local advertising for cryptocurrencies. After the attack on Nobitex, the Central Bank of Iran even introduced a cryptocurrency curfew policy, strictly regulating that domestic cryptocurrency platforms are only allowed to operate between 10 AM and 8 PM daily.
The various restrictions and regulations reflect the official's apprehension towards cryptocurrencies. On one hand, under the current conditions of blockade, cryptocurrencies serve as an important means for the local industry to develop and acquire foreign exchange, acting as a significant trading window for Iran. Objectively, there is a reason for their existence. On the other hand, due to the impact of cryptocurrencies on monetary sovereignty and the power losses in the mining industry, the authorities cannot allow them to develop freely and must attempt to strike a balance between innovation and regulation. This point also resonates in the religious sphere; in Iran, where religious authority is highly centralized, speculative cryptocurrencies naturally carry a taboo connotation. Traditional religious conservatives harbor significant disdain for them, yet Iran's Supreme Leader Khamenei believes in maintaining a progressive attitude. The open-minded and conservative factions maintain a delicate balance on this issue.
Of course, whether acceptance or opposition, the current situation clearly shows that the flames of war between Iran and Israel have spread from the physical realm to cyberspace and further into the financial sector. The cryptocurrency sector, as part of this, can only face this impact. For Iran, the attack on exchanges may just be the beginning, and the subsequent game between the two will only exhibit more complex, sophisticated, and hidden characteristics.
For the global cryptocurrency industry, geopolitics will become the absolute main line of the short-term market, and risk aversion sentiment will greatly influence the trend of cryptocurrencies. Currently, due to frequent positive developments within the industry, the sentiment remains relatively mild, and market fluctuations are relatively controllable. Bitcoin's support at $98,000 is very strong, and there is a trend of BTC exiting exchanges. Additionally, Bitcoin ETFs saw a net inflow of $1.02 billion last week, indicating that the market still holds a positive attitude towards Bitcoin. However, the involvement of the United States brings a high degree of uncertainty, and the scope and extent of its involvement will have a broad impact on the battlefield. If it leads to the closure of the Strait of Hormuz, the market will face even greater volatility.
Moreover, it is worth noting that as the conflict causes oil prices to soar, the Federal Reserve, already wavering between tariffs and inflation, will enter a longer observation window. Maintaining high interest rates in the third quarter is gradually becoming a market consensus, and this move will have a more profound impact on the cryptocurrency market.
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