Israel-Iran Conflict Intensifies Market Concerns, Is Bitcoin Safe?
JAKARTA – Global market volatility has increased following US President Donald Trump’s announcement of a planned 15 per cent import tariff increase, which has triggered concerns among market participants. Simultaneously, the Israel-Iran conflict is adding pressure to world financial markets, including cryptocurrency assets.
This turbulence is not merely a fleeting sentiment. Geopolitical tensions and trade policy have the potential to affect capital flows, global liquidity, and interest rate trajectories, which have hitherto supported the movement of risk assets such as cryptocurrencies.
The chronology of the Israel-Iran conflict demonstrates rapid escalation. Israel launched an attack on Iran’s capital, Tehran, on Saturday 28 February 2026 (Indonesian time), amid ongoing nuclear negotiation processes between Iran and the United States. Shortly thereafter, Iran launched a retaliatory strike by firing ballistic missiles at US military bases in Bahrain.
This situation has triggered an increasingly volatile regional environment. The US continues to demand that Iran halt its nuclear programme and refuses to accept Iran’s uranium enrichment, which has reached 60 per cent. This uncertainty is prompting global investors to generally reduce risk exposure across various asset classes.
“In many instances, institutional investors tend to reduce their cryptocurrency exposure when global volatility increases, particularly if driven by major policy decisions such as tariff increases,” said Calvin when contacted by Kompas.com.
According to him, during risk-off phases, global asset managers typically engage in de-risking by reducing allocations to high-risk assets, including technology stocks, emerging market securities, and cryptocurrencies. Funds are subsequently redirected to cash, US government bonds, or more stable money market instruments.
“During risk-off phases, asset managers typically engage in de-risking by reducing allocations to high-risk assets, including technology stocks, emerging markets, and cryptocurrencies, then redirecting funds to cash, US government bonds, or money market instruments,” he explained.
The combination of these factors has prompted investors to reduce risk comprehensively, including in cryptocurrency assets which are known to be highly volatile.
Institutional investor responses are not always uniform. Short-term institutions such as leveraged hedge funds typically reduce their exposure more quickly when volatility spikes sharply.
By contrast, institutions with longer investment horizons, such as major asset managers or publicly listed companies holding Bitcoin as part of their treasury strategy, generally do not react as aggressively, unless there are significant fundamental changes in liquidity or regulation.
“Short-term institutions such as leveraged hedge funds typically reduce positions more quickly when volatility rises. Conversely, institutions with longer investment horizons, such as major asset managers or companies holding Bitcoin as part of their treasury strategy, tend not to react as aggressively unless there are significant fundamental changes in liquidity or regulation,” he stated.