$128 billion Vanishes from Crypto After Israel Strikes Iran

- Middle East conflict wipes $128 billion from the crypto market. - Institutional investors exploit 24/7 trading to hedge amid geopolitical unrest. The crypto market endured a sharp downturn this weekend, losing $128 billion after Israel launched a preemptive strike on Iran. On February 28, 2026, Cryptopolitan reported that Defiance Capital CEO Arthur Cheong explained this dramatic market fallout, attributing the drop to institutional investors leveraging crypto markets when traditional financial markets are closed. Cheong argued that institutional players increasingly exploit crypto’s 24/7 trading availability, especially during high-stakes geopolitical events like the Middle East conflict. He explained that heightened uncertainty triggers risk-off behavior, which prompts institutions to de-risk their portfolios and sell off digital assets. According to Cheong, these dynamics heavily impacted Bitcoin and other major cryptocurrencies, as institutional capital utilizes crypto as a short-hedging tool that amplifies market volatility during periods of geopolitical strain. Meanwhile, industry leaders like Bitwise CIO Matt Hougan see potential opportunities amid market disruptions. Hougan emphasized that heightened stress often causes mispricing in crypto markets, offering motivated investors a chance to acquire undervalued assets and diversify their portfolios. He noted that this disconnect between market sentiment and asset fundamentals can serve as a strategic entry point for long-term gains. As of February 28 at 17:08 UTC, the latest data shows several declines. Bitcoin (BTC) was trading at $65,009.18, a 0.94% decrease in 24-hour volume, while Ethereum (ETH) stood at $1,901.49, down 1.62% in trading activity. Other notable declines included Aave (AAVE), priced at $108.22, a 4.26% drop; Lido DAO (LDO), trading at $0.29, a decline of 3.72%; and Arbitrum (ARB), at $0.092, down 7.95% in daily trading volume.