From shadow wars to open flames: The escalation of the Israel-Iran conflict puts global markets on a knife's edge.

In June 2025, the Middle East powder keg was ignited again, and the conflict between Israel and Iran entered a new phase of intensification. This conflict is not only a continuation of the long-standing hostility between the two sides but has also drawn global attention due to the involvement of nuclear program intelligence warfare and direct military strikes.

The Context of the Conflict: From Information Warfare to Escalation of Airstrikes

On June 7, Iran announced in a high-profile manner that it had obtained "thousands" of confidential documents related to Israel's nuclear program, claiming that this was a "tit-for-tat" action against the 2018 theft of Iranian nuclear files by the Israeli intelligence agency Mossad. Iranian state media reported that this intelligence operation took months and the documents involved Israel's nuclear facilities and strategic plans, aimed at deterring Israel and increasing leverage in nuclear negotiations.

Israel responded quickly. On June 12, news began circulating on platform X that Israel might take military action against Iran, causing market tensions to surge. In the early hours of June 13, the Israeli Air Force launched a large-scale airstrike, code-named undisclosed, targeting nuclear facilities, military bases, and missile production centers in Tehran and surrounding areas. According to Al Jazeera, explosions were heard continuously over Tehran, and Israeli Defense Minister Katz subsequently declared a national state of emergency, warning that Iran might launch retaliatory missile and drone attacks.

User X reported that Israel may have "decapitated" the Chief of Staff of the Iranian Armed Forces and senior officers of the Revolutionary Guard, sparking speculation about a power vacuum within Iran. Although the Iranian officials have not yet confirmed the high-level casualties, the spokesperson for the Iranian Foreign Ministry condemned Israel's "aggressive actions" and vowed to take "devastating countermeasures." Iran's Supreme Leader Khamenei, however, expressed caution, stating that the attack should "not be exaggerated or downplayed," seemingly leaving room for possible retaliatory actions.

The fuse of conflict is not limited to the information war. The collapse of the Gaza ceasefire agreement since March 2025 has buried hidden dangers for the Middle East situation. Israel has not fulfilled its commitment to withdraw from Gaza as stated in the agreement and launched the "Operation Power and Sword" against Gaza on March 18, resulting in over 400 deaths and triggering strong condemnation from Iran. In addition, the United States has restarted its "maximum pressure" policy against Iran, attempting to reduce Iran's oil exports to "zero," further intensifying Iran's confrontational sentiment.

Global Financial Markets: Risk Aversion Rises, Volatility Intensifies

The escalation of the Israel-Iran conflict has had a significant impact on global financial markets. Following the news of airstrikes on June 13, the market quickly entered a risk-averse mode. Gold prices rose sharply in a short period, breaking through $3400 per ounce. The crude oil market also experienced extreme fluctuations, as the Strait of Hormuz, controlled by Iran, may face the risk of blockade, with Brent crude oil prices approaching $90 per barrel at one point.

If the conflict escalates further, oil prices may hit three digits, and the global supply chain will face serious threats.

In the stock market, major stock indices in the Asia-Pacific and Europe generally fell after opening on June 13. S&P 500 futures dropped by about 1.5%, with tech stocks particularly pressured due to supply chain concerns. In the Asian market, the Nikkei 225 index and the Hang Seng index fell by 2% and 1.8%, respectively. Market analysts pointed out that the uncertainty in the Middle East may force investors to shift from high-risk assets to safer assets like government bonds, causing the yield on the 10-year U.S. Treasury bond to slightly retreat.

Cryptocurrency: Short-term Plunge and Long-term Uncertainty

The cryptocurrency market reacts particularly strongly to geopolitical risks. After the announcement of the airstrike on June 13, Bitcoin (BTC) fell 3.5% within 12 hours, dropping to around $103,000; Ethereum (ETH) experienced a larger decline, exceeding 8%, hitting a low of $3,436.

User X @ordjingle jokingly称 "Bitcoin wallet bulls almost wiped out", reflecting the market's panic sentiment.

The reasons for this decline are mainly threefold: First, geopolitical conflicts usually increase the demand for safe-haven assets (such as gold and the US dollar), weakening the attractiveness of cryptocurrencies; secondly, Iran, as an active country in cryptocurrency trading, has seen its domestic market thrown into chaos due to the dual pressures of conflict and sanctions. In February, the Central Bank of Iran's suspension of rial payments for cryptocurrency exchanges has already restricted 10 million users, and this conflict may further suppress local demand; finally, the uncertainty of the global macroeconomic environment prompts investors to reduce holdings of high-volatility assets, with the cryptocurrency market being the first to bear the brunt.

User X @NFTfafafa warns that if the conflict escalates into a full-scale war, the crypto market may face an "unprecedented crash."

Outlook: Pricing Risks Amid Uncertainty

Currently, the confrontation between Israel and Iran has entered an extremely dangerous "action-reaction" spiral. Iran's missile arsenal has the capability to strike all of Israel, while Israel has military options to destroy Iran's nuclear program. Any misjudgment by either side could plunge the entire Middle East into an unprecedented war.

For the global market, this means that the geopolitical risk premium will remain high for the foreseeable future. Investors need to closely monitor the subsequent developments of conflicts, the trend of crude oil prices, and the potential policy adjustments that major central banks may take in response to potential economic shocks.

In the current chaotic situation, whether in the traditional financial market or the crypto world, the core task is to reprice this new and already upgraded risk.