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Can Bitcoin Falter Under the Impact of Armed Conflict? A concrete example is the recent drop in hashrate. Within weeks, a military operation in the Middle East had thrown the network off balance and highlighted its dependence on certain mining areas. At the same time, the rise in US earnings and the slowdown in crypto platforms reflect the gradual disengagement of investors. Between geopolitical tensions and macroeconomic pressures, the market is exposing weaknesses rarely seen on this scale.
In short
- The military operation in the Middle East coincided with a significant drop in Bitcoin’s hashrate, revealing the network’s sensitivity to geopolitical tensions.
- Iran, a major player in global mining, is seeing its capacity affected by energy shortages and shifting military priorities.
- A rise in US bond yields to 4% is pushing investors to reduce exposure to risky assets such as bitcoin.
- The crypto market is showing signs of slowing down, as illustrated by the fall of Robinhood and a significant drop in trading volumes.
Bitcoin hashrate hit by Iran conflict
The Bitcoin network has seen a roughly 6% drop in its hashrate following a military operation by the United States and Israel in Iran. This contraction occurred one month after the operation began “Epic Fury”.
According to Bloomberg crypto analyst Dushyant Shahrawat “Iran is one of the largest bitcoin miners in the world,” representing between 6 and 8% of the global hashrate, p “70% of mining operations controlled by the military.”
This situation is related to several structural factors directly related to the geopolitical context:
- Iran contributes 6 to 8% of global hashrate;
- About 70% of mining there is controlled by military entities;
- Energy infrastructures have been disrupted by the conflict;
- Funds were redirected to defense priorities.
These combined factors reduced the country’s hashrate production capacity, causing a measurable impact on the entire Bitcoin network. Such an episode reveals the often underestimated dependence on key geographic mining areas.
Macroeconomic Pressures and Crypto Market Reshaping
In addition to this episode, the crypto market is operating in a less favorable macroeconomic environment. U.S. five-year Treasury yields hit 4%, a level that encourages investors to favor less risky assets.
This momentum weighs on Bitcoin, whose price has remained relatively stable around $67,000. In this climate, some platforms are experiencing a significant decline. Robinhood saw its stock drop more than 16% during the month, while its crypto transaction revenue fell 38% year-over-year. Its application volumes also decreased by 58%.
At the same time, the other segments show the opposite momentum. Prediction markets topped $192 million in transactions in March, up 2,880% year over year. This growth comes with regulatory tensions, with several US states accusing these platforms of offering gambling-like activities. In addition, euro-denominated stablecoins now dominate the non-dollar segment with 85% of volumes, supported by increasing adoption and more structured regulatory frameworks.
This development reflects the gradual rebuilding of the crypto market. The influence of macroeconomic factors in combination with the emergence of new ways of use is redefining the priorities of investors. In this context, the ecosystem’s ability to absorb external shocks, such as Iran’s rejection of peace talks promises, while adapting to these new dynamics could determine its trajectory in the coming months.
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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I committed myself to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. I strive every day to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations, and put into perspective the economic and social issues of this ongoing revolution.
DISCLAIMER OF LIABILITY
The views, thoughts and opinions expressed in this article are solely those of the author and should not be taken as investment advice. Before making any investment decision, do your own research.
