The omnipresent threat of conflict between the U.S. and Iran is sending shockwaves through global markets, with even the most resilient asset classes showing signs of fragility.
Social media posts from Iran’s Supreme Leader Ali Khameini appear to have triggered a sharp sell-off across markets, erasing ~$840B from the market cap of gold.
Amidst the chaos, crypto altcoins are holding up comparatively well, suggesting that long-tail assets may have exhausted sellers and found a bottom.
After the relative quiet of U.S. Presidents’ Day and Chinese New Year, fear and uncertainty reigned supreme in today’s market open. Responding to reports that the U.S. Military is massing warships and aircraft carriers off the coast of Iran, tweets from the official account of Supreme Leader Ali Khameini ampilifed tensions in the region even further.
The looming threat of conflict between the two nations had a profound impact on markets, inflicting a sharp sell-off across several asset classes at market open.
Widely considered to be one of the world’s most resilient stores of value, gold dropped below $4900, falling 2.2% within the first hours of the week’s trading. Silver suffered a similar fate, falling 5% to test support at ~$72/oz.
Publicly traded stocks and equities didn’t fare much better in the market meltdown. After a strong run lasting 3 quarters, traders argue that the S&P500 is starting to show weakness.
In the grip of bearish divergence, the index now finds its momentum waning. While the S&P500 has successfully recorded several new all-time highs in the last year, its current market structure suggests the index has fallen into the mid-point of a range that originally started in October 2025.
While Bitcoin witnessed more of its trademark volatility in the face of mounting geopolitical tensions, crypto altcoins further down the risk curve appear to be holding up comparatively well. Minor altcoins were relatively unaffected by the crash.
OTHERS.D, an index tracking the performance of crypto valuations outside the top 10 coins, rose 0.7% amidst the chop to return to levels not seen since before the catastrophic liquidation events of October 10.
Despite Khameinei’s post sparking fears of imminent conflict, prediction markets are not convinced. Odds of the U.S. striking Iran before February 24 remain as low as 9%, down from 16% in the last 24 hours. Conflicting reports only add to the uncertainty, with sources suggesting that progress is being made in negotiations between, while others claim that Russia and China have also dispatched ships into the Hormuz Strait.
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