On Friday, June 13, the cryptocurrency market experienced a major crash. This decline was caused by the significant increase in geopolitical tensions following Israel’s significant military campaign around Iran. That market crash came at a moment when fears were already elevated due to the threat of retaliatory measures and increased general chaos in the Middle East.

Israeli Prime Minister Benjamin Netanyahu as the operation began announced the start of “Operation Rising Lion.” He reiterated that the objective is to neutralize Iran’s path to a nuclear weapon. In reaction to this intensifying conflict, Israel declared a state of emergency. The country even went so far as to close its main airport and strengthen its air defenses in anticipation of counterattacks. Iran has promised a “harsh response,” only increasing the uncertainty and risk aversion among investors.

Needless to say, the crypto market was not happy with these developments. Ethereum (ETH) tanked 10% to $2,471, and Solana (SOL) crashed 11% to $141. Non-Ethereum L1s such as XRP (XRP) and BNB (BNB) fell, down 6% and 4% respectively. Bitcoin (BTC) joined the downward rush, dropping approximately 5% at the time of writing to a price of $103,464.

Despite all of this, the overall impact on the crypto market has been huge. Changes in the total crypto market capitalization The entire crypto market cap dropped by 7% in the last 24 hours, to $3.3 trillion. Concurrently, open interest in crypto futures markets plummeted. It fell 9.7% to $142 billion, a clear indication that many traders are stepping away from leveraged positions.

The combination of military action and the subsequent threats of retaliation have formed a risk-off environment. Investors are fleeing volatile riskier assets including cryptocurrencies. The environment continues to be dynamic, and more market turbulence is anticipated as the ever-changing global geopolitical environment develops.