Bitcoin climbed back above $68,000 in early Asian trading after Iran confirmed the death of Supreme Leader Ayatollah Ali Khamenei during a joint US and Israeli military operation.
The leading cryptocurrency rose as much as 2.21% to $68,196 before easing to around $67,700 by late morning in Singapore, following a sharp 3.8% slide the previous day.
Ethereum also rebounded strongly, gaining up to 4.58% to reclaim the $2,000 level as risk appetite returned to parts of the digital asset market.
Crypto markets, which operate around the clock, initially tumbled as reports of Iranian counterstrikes across Israel, Qatar, the United Arab Emirates and Bahrain unsettled global investors.
Prices began to stabilise as traders reassessed the broader economic fallout and reacted to confirmation of Khamenei’s death.
“Traders generally don’t expect the Iran conflict to have major negative economic consequences, and demand for upside Bitcoin calls has clearly picked up in recent days,”
Markus Thielen said.
He added that positioning ahead of the upcoming Federal Reserve meeting also influenced renewed appetite for risk.
According to data from CoinGecko, cryptocurrencies regained roughly $32 billion in market value by Sunday morning after losing about $128 billion a day earlier.
“Bitcoin is the only large liquid asset trading 24/7, so it absorbed all the selling pressure that would normally spread across equities, bonds, and commodities,”
Hayden Hughes said.
“The real price discovery happens Monday when US equity markets and Bitcoin ETFs reopen, and with missiles hitting Dubai and Strait of Hormuz closure risk, this is not a contained event,”
He added.
Analysts noted that the weekend volatility extended a broader downturn that began with the unwinding of nearly $19 billion in leveraged crypto positions in October.
Bitcoin remains down roughly 50% from its record high above $126,000 earlier that month, lagging behind rallies seen in gold and other traditional safe-haven assets
“As always, when critical events take place during the weekend, Bitcoin plays the role of pressure valve,”
Justin d’Anethan said.