US strikes Iranian military sites as crypto markets absorb $600M in liquidations

US forces struck Iranian military positions near Bandar Abbas on May 29, and Iran’s Islamic Revolutionary Guard Corps fired back at a US air base within hours. The exchange of fire near one of the world’s most critical oil chokepoints sent shockwaves through every asset class, but crypto took a particularly sharp hit: more than $600 million in liquidations, Bitcoin briefly trading in the low $70,000s, and a Treasury Department that has now seized roughly $1 billion in Iranian-linked digital assets.

What happened on the ground

The Pentagon described the strikes near Bandar Abbas as defensive measures, which included downing Iranian drones over the Strait of Hormuz. The IRGC responded around 4:50 a.m. local time, claiming it successfully targeted a US air base in retaliation.

The Strait of Hormuz matters because roughly a fifth of the world’s oil supply passes through it daily. These clashes also threaten to unravel a fragile ceasefire between the two countries that was established in April 2026. That ceasefire had briefly calmed markets and allowed Bitcoin to stabilize after an earlier bout of tension-driven selling.

The crypto fallout

The immediate aftermath of the strikes produced approximately $200 million in crypto liquidations. Earlier tensions in the days leading up to the strikes had already contributed over $400 million in liquidations, bringing the combined total past $600 million. Bitcoin dropped below $77,000 during the selloff and briefly traded in the low $70,000s as leveraged long positions got wiped out in rapid succession. Combined crypto market outflows exceeded $1.4 billion over just a few days as investors rotated into safer havens.

Polymarket recorded a notable uptick in betting activity around potential US strikes against Iran before the action was publicly confirmed, raising uncomfortable questions about whether insiders were placing wagers ahead of the news.

The Treasury’s digital asset crackdown

US Treasury Secretary Scott Bessent confirmed that approximately $1 billion in Iranian-linked digital assets have been seized as tensions escalated. Iran has long been accused of using digital tokens to circumvent economic sanctions, particularly through exchanges with ties to the IRGC. The seizures suggest that US authorities have significantly improved their ability to trace and freeze these flows.

What this means for investors

The $1 billion in seized Iranian-linked assets signals an evolving regulatory posture that market participants need to factor into their models. If the US government continues to treat crypto seizures as a sanctions enforcement mechanism, compliance costs for exchanges will rise, and certain categories of cross-border transactions will face increased scrutiny.

The cumulative liquidation figures show that the market responds to geopolitical shifts with brutal efficiency. If tensions around the Strait of Hormuz continue to escalate, or if the April ceasefire formally collapses, further cascading liquidations are not just possible but likely.

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