Crypto markets shed nearly $80 billion in market cap over 24 hours after the US carried out fresh air strikes on Iran, the second attack in three days. Bitcoin hit its lowest level since mid-April, while Ethereum dropped below $2,000.
Second Strike in Three Days
Late Wednesday, US forces struck an Iranian military site and shot down four drones near the Strait of Hormuz. A US official described the operation as "measured, purely defensive, and intended to maintain the ceasefire." Iran's Islamic Revolutionary Guard Corps said they responded with an attack on a US air base in Kuwait.
The armed conflict between the US, Israel, and Iran started February 28 and has continued since. Donald Trump, at a White House cabinet meeting, said he was "not satisfied" with the state of talks and hinted at further military action. Crypto had partially recovered earlier this week on signals of a peace deal being close. The overnight strikes reversed that recovery within hours.
The first strike earlier this week barely moved the market. The second hit harder, and traders started pricing in the probability of a prolonged escalation.
Bitcoin Below $73,000, Ethereum Below $2,000
Bitcoin fell to $72,646 on Coinbase, its lowest since April 13. The 24-hour decline reached 3.5%. Ethereum lost over 4% and traded at $1,976, erasing gains back to late March levels. The $2,000 support did not hold.
Total market cap dropped to levels not seen in over a month. Passive outflows were reinforced by automatic liquidations as open long positions closed in a cascade. Most top-20 altcoins fell 3-5% in the same window. Equities declined too, while oil moved the other way.
Analysts: Crypto Acts Like a Risk Asset
Nick Ruck, director of research at LVRG Research, commented to Cointelegraph:
"Bitcoin and Ethereum, despite their long-term narrative as hedges, continue to behave more like high-beta risk assets during periods of uncertainty."
- Nick Ruck, director of research at LVRG Research, May 28, 2026
According to Ruck, the market is pricing in three simultaneous risks: geopolitical escalation, potential oil supply disruptions through the Strait of Hormuz, and a shift in Federal Reserve rate expectations. Traders cut positions, liquidity in trading pairs thinned, and liquidated longs accelerated the move lower.
Crypto's correlation with equity risk assets shows up most clearly in crisis moments, even when Bitcoin trades more independently during calm periods. A sharp geopolitical shock resets that buffer within hours, and capital flows follow a "sell risk" pattern that puts crypto in the same category as tech stocks.
Oil Up 3.5%, Fed Under Pressure
As crypto fell, oil moved the other way. WTI crossed $92 per barrel and Brent reached $98, up 3.5% on the day. Around 20% of global oil supply passes through the Strait of Hormuz annually, and even the threat of disruption is enough to push prices sharply without any actual blockade.
The chain of impact on crypto is indirect but real. Expensive oil keeps inflation above the Fed's target, the Fed holds its hawkish tone, risk appetite falls, and capital exits crypto. Futures markets after yesterday's events pushed back their expectations for the first Fed rate cut. For crypto, that means the unfavourable macro backdrop stays in place until the Middle East situation becomes clearer.
What to Watch Next
The key variable for the coming days is whether the Strait of Hormuz stays open for oil transit. If the escalation does not affect traffic, markets may recover quickly, as they did after the first strike. Prolonged negotiations or new attacks would shift that outcome.
Analysts are tracking futures funding rates and Bitcoin ETF outflow data. Positive funding during a price decline shows that long positions have not capitulated yet, which means the market is waiting for de-escalation rather than positioning short. That is a different setup from a full breakdown in sentiment.
Those looking to sell Bitcoin for Ukrainian hryvnia through exchange offices should note that rates follow market moves with a short lag. The payout has already shrunk by a few percent overnight, and a further decline would push it lower again.
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