TLDR:
- Bitcoin dropped to $63K within minutes of the Iran War breaking out, triggering over $515M in crypto liquidations.
- Gold surged past $5,200 as the Iran War intensified, with Bank of America forecasting a $6,000 per ounce target.
- The Strait of Hormuz carries 20% of global oil daily, and tankers are already halting movement amid the Iran War.
- Recession probability jumped from 25–30% to 40–50% as the Iran War threatens sustained disruption to global oil supply.
The Iran War has triggered an immediate financial shockwave across every major asset class. Open military conflict between the U.S., Israel, and Iran erupted on February 28, following explosions across Tehran, southern Lebanon, and near U.S. military bases.
President Trump declared “major combat operations” under Operation Epic Fury. Iran responded with missile strikes on Israeli and U.S. Gulf bases.
Investors across every market are now reassessing their positions as the situation continues to evolve hour by hour.
Stock Markets Face a Historic Test as War Escalates
The Iran War arrived at an already fragile moment for equities. The S&P 500 had turned negative for 2026 before the first strike even landed.
Bank of America held the most bearish S&P 500 outlook heading into the conflict, with a year-end target of just 7,100.
Historical data, however, offers a counterpoint worth noting. CFA Institute data shows U.S. large-cap stocks returned 11.9% annualized during wartime versus 10.0% during peacetime periods.
Across six major conflicts, the pattern has remained consistent — markets sell off before the war begins, then recover shortly after it starts.
The critical difference this time is oil. None of those previous wars directly threatened a supply corridor handling 20% of global crude.
If the Strait of Hormuz faces prolonged disruption, the historical “buy the war” playbook may not hold. Recession probability has already shifted from roughly 25–30% to an estimated 40–50%.
Bitcoin and Gold Split as Investors Seek Safety
Bitcoin dropped to approximately $63,000 within minutes of the Iran War breaking out, falling 3.8% almost immediately.
Over $515 million in crypto liquidations followed, erasing roughly $128 billion from total market capitalization. Ethereum fell 5.5%, with $149 million in ETH futures liquidations recorded by CoinGlass.
Gold, by contrast, surged past $5,200 and settled near $5,296 in the same window. Silver climbed 7.85% alongside it.
Gold had already gained 13.31% in January alone, reflecting a months-long trend driven by central bank buying and growing de-dollarization momentum.
The divergence between the two assets tells a clear short-term story. Bitcoin is trading like a risk-on asset, absorbing panic selling during weekend hours when no other liquid market is open.
Gold is functioning as the traditional safe haven. Bank of America expects gold to reach $6,000 per ounce over the next 12 months, and every current macro condition supports that trajectory.
Oil Prices and Economic Fallout Determine What Comes Next
The Iran War’s economic consequences hinge almost entirely on what happens at the Strait of Hormuz. Roughly 20 million barrels of oil pass through it daily, covering Qatar’s LNG, UAE crude, and most of Kuwait and Iraq’s exports.
Tanker traffic has already slowed, with Japanese shipping firm Nippon Yusen directing its full fleet away from the strait.
Brent crude closed the prior Friday at $72.48, while WTI jumped to $75.33, up 12% in a single session. Lombard Odier estimates a temporary spike to $100 per barrel is plausible under current conditions.
A sustained 20–30% oil price increase could depress global growth by 0.5–1.0% and push headline inflation higher by a similar margin.
The chain reaction from there runs through the entire economy. Higher oil raises costs across transportation, manufacturing, and consumer goods. Spending contracts, confidence falls, and growth slows.
The Federal Reserve, already stuck with rates at 3.5%–3.75% and inflation near 3%, has little room to respond. If Brent remains below $90, markets may stabilize. Above $100 sustained, the road through 2026 becomes considerably rougher.
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