Cryptocurrency prices experienced a decline on Saturday evening following Iran’s deployment of a wave of drones towards Israel, signaling potential market turmoil as investors factor in the risk of a broader conflict in the Middle East.

Bitcoin witnessed a 5% decrease from its Friday price, while ether and XRP saw drops of over 7% and 13.5% respectively, as reported by CoinMarketCap. This trend indicates pressure on risk assets.

The reaction of Wall Street to Iran’s unprecedented full-scale military action against Israel will be more evident on Sunday evening with the opening of futures trading in the U.S. across various asset classes.

The anticipation of an Iranian assault on Israel within two days, as reported on Friday, drove U.S. benchmark oil prices up by as much as 3%, surpassing $87 a barrel.

Furthermore, U.S. Treasury bonds experienced a significant rally, causing the 10-year yield to decline by up to 10 basis points as investors sought safety.

Geopolitical tensions led to a strengthening of the U.S. dollar, with investors shifting away from riskier emerging-market currencies. The euro also depreciated against the dollar to a five-month low, amid speculations of a possible rate cut by the European Central Bank preceding the Federal Reserve’s actions.

Gold prices, a traditional safe-haven asset, surged to a new record high above $2,400 per ounce before retracting those gains towards the end of Friday.

Stock markets witnessed a sell-off, particularly impacting tech shares, while investors analyzed bank earnings and inflation data that tempered expectations of immediate Fed rate adjustments.

The escalation of tensions in the Middle East dates back to October when Iran-backed militants targeted Israel. Subsequently, Iranian-supported groups from Lebanon, Iraq, Syria, and Yemen launched attacks as well.

Recent events include Tehran accusing Israel of a Syrian airstrike on April 1 that resulted in the deaths of two Iranian generals, although Israel has not responded to these allegations.

As Iran’s actions against Israel intensify, there is a heightened risk of the U.S.—a key military ally to Israel—getting involved in direct confrontations with Iran. The White House has pledged support for Israel’s defense and deployed additional Navy ships to the region in preparation for potential hostilities.

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