Major Coins at Risk? Trump’s Iran Threats Could Trigger a Fresh Altcoin Sell-Off

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Mounting tensions in the Middle East and persistent inflation fears are shaking global markets, prompting a sharp shift in investor behavior across the crypto landscape. As volatility spreads to equities, commodities, and digital assets, traders are rapidly abandoning altcoins and heading to perceived safer investments, including bitcoin and stablecoins.

Major cryptocurrencies continued their downward spiral on Thursday, as the general macroeconomic and geopolitical fear crept in. Cardano (ADA), Solana (SOL) lost over 1% in the last 24 hours, and XRP showed the same trend.

Bitcoin ETFs Attract Inflows Despite Declines

Bitcoin ETFs Attract Inflows

Dogecoin remained stable today but has declined more than 10 percent in the past seven days to wipe away its gains after a quick rally this month. Ether (ETH) also lost 0.7 percent, canceling out any gains made during the week.

On the one hand, spot bitcoin ETFs based in the U.S. saw robust inflows in the week amid a downturn in prices, with more than $389 million being pulled in on Wednesday alone, according to data.

Spot ETH ETFs did gain a total of $19 million in net positive flows though, which represents something of a conservative but stable investor bias towards blue-chip crypto exposure over the uncertainty.

U.S.–Iran Tensions Spark Market Volatility

Markets are rattling on worries that the U.S can directly strike Iran and an action is being considered by the U.S after tensions have been increased in the region. The increased possibility of the escalation of the conflict is shifting the investing approaches to defensive strategies, which increases the volatility in both classic and digital markets.

Meanwhile, the Federal reserve also gave new cautions of persistent inflation. On Wednesday, Chair Jerome Powell said that tariffs and geopolitical instability may also complicate the efforts to contain the rise in prices.

The Fed maintained the same interest rates but Powell warned that the interest rates can only be lowered when convincing information is received by the central bank. The cost of tariffs will fall on the end consumer, Powell said, which signaled a hawkish pitch that hurt Thursday market sentiments.

Stablecoins, Bitcoin Gain Preference Over Altcoins

Altcoins, which are perceived to be riskier investments than bitcoin, have been hit the worst by the market declines. When the world becomes unstable, speculative assets are the first ones that are sold.

Amanda Lee, a digital asset strategist at Frontier Markets said altcoins are suffering as macro stress mounts. We’re seeing a textbook risk-off move. Capital is rotating toward stablecoins and BTC, and away from smaller-cap coins.

The market activity of bitcoin has been mixed despite the inflows of ETF. The largest cryptocurrency in the world has increased by 13% in the year-to-date after ETF bullishness and a weaker dollar. Nonetheless it has not demonstrated where it wants to go amidst the recent crisis.

Bitcoin’s Unclear Role Frustrates Market Bulls

FxPro analyst Alex Kuptsikevich said Bitcoin seems stuck between two worlds. It does not respond to rising risk appetite, and does not flood like gold during periods of increased conflict.

Gold has been surging on the trend of the increased geopolitical temperature, whereas Bitcoin has been rangebound, unable to categorically break in a higher direction or work as an effective hedge. This is an infuriating ambiguity that has the bulls wishing that a safe-haven trajectory will gain power.

Analysts caution against more turbulence in the crypto market as the uncertainty geopolitical and economical winds are both blowing. Interested parties will be particularly divided between what is happening in the Middle East and further statements by the Fed to pick up.

Conclusion

The crypto market is in the state of volatility and uncertainty as geopolitical tensions continue to intensify together with inflationary concerns. Bitcoin is experiencing consistent inflows of ETFs whereas its status as a safe haven is still to be proven.

Altcoins are in the cross fire and investors are holding their positions defensively, and all the attention will now be focused on what happens next in the Middle East and what happens next at the Federal Reserve.