- Tensions between the United States and Iran have escalated in the Middle East amid a surge in risk aversion.

The U.S. Central Command (Centcom) announced on Tuesday that it launched "self-defense" strikes against Iran on Qeshm Island in the Strait of Hormuz.
Centcom added that it "downed several" Iranian missiles and drones in response to Iranian drone attacks on U.S. forces in Kuwait. Reports also indicated that Iran launched three missiles at Bahrain, which were intercepted by U.S. and Bahraini air defenses.

The Iranian Revolutionary Guard Corps stated in a statement: "We previously warned that in case of aggression, the response would be different and more severe, and we acted accordingly."

Despite reports that Iran has halted communications amid peace negotiations through mediators, U.S. President Donald Trump rejected these claims, calling them "false and incorrect," according to the Associated Press.

"Talks between us are ongoing, including four days ago, three days ago, two days ago, yesterday, and today," Trump said in a social media post. "No one knows where it will lead, but as I told Iran: 'It's time, sooner or later, to reach an agreement.'"

As tensions between the U.S. and Iran continue, markets remain under intense pressure, as evidenced by the cryptocurrency fear and greed index, which settled at 11 points in the extreme fear zone on Wednesday, down from 23 points the previous day. This decline indicates ongoing risk aversion, which may continue to negatively impact interest in digital currencies.
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