Crypto Investors Cautious as Iran Conflict Continues

Conflict in the Middle East is making digital assets traders more cautious, Bloomberg News reported Monday (March 2).

Cryptocurrencies fell Saturday (March 1) following news that the United States attacked Iran. A slight rebound came after reports that Iran’s Supreme Leader Ayatollah Ali Khamenei had been killed, the report said.

Since then, Iran has struck back against Israel and at American military bases throughout the Gulf region, according to the report. Bitcoin’s price had climbed slightly Monday to $66,213 but fell below $66,000 by mid-morning, while energy prices spiked.

“The focus is mainly on oil this morning, with all eyes on the developing Strait of Hormuz situation,” said Caroline Mauron , co-founder of Orbit Markets , per the report, in reference to trade disruptions along the crucial Gulf waterway. “Crypto is a sideshow for now and will remain so as long as it stays in the $60,000 to $70,000 range of the past few weeks.”

The price of Bitcoin , the world’s most popular form of crypto, has been on a downward trajectory since reaching a record high of $126,272 in October. The shift began when President Donald Trump announced an added 100% tariff on China, leading to what has been termed the largest liquidation event in the history of crypto.

Within hours, more than $19 billion was wiped out, and more than 1.6 million traders liquidated, with over $7 billion of those positions sold within a single hour of trading.

In other news from the digital asset space, Morgan Stanley submitted an application to the U.S. Office of the Comptroller of the Currency (OCC) for a charter for a digital asset-focused national trust bank.

A trust bank, as opposed to a traditional commercial bank, does not provide loans or deposits, but instead focuses on custody , fiduciary services and asset administration, essentially functioning as a highly regulated vault and legal steward. This structure could be well-suited to crypto and other digital assets.

“The trust bank charter offers a solution,” PYMNTS reported Friday (Feb. 27). “It allows a firm to handle digital assets under the supervision of the OCC while avoiding the capital and liquidity requirements associated with deposit-taking institutions. In regulatory terms, it is a bridge. In strategic terms, it could be an on-ramp for traditional finance to take over functions once dominated by crypto-native firms.”