(Bloomberg) -- Bitcoin saw a rebound following its sharpest selloff in over a year, hinting at potential volatility across asset markets as investors grapple with the implications of a military escalation in the Middle East.
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The largest cryptocurrency surged up to 5.9% and settled around $64,600 as of 11:40 a.m. in London on Sunday. Meanwhile, smaller coins like Polkadot and Uniswap witnessed gains of over 10%, with Ether also climbing 5%.
In an apparent response to a strike in Syria that killed senior Iranian military figures, Iran launched drone and missile attacks against Israel, escalating tensions in the region. As these events unfolded while most markets were closed, crypto traders found themselves at the forefront of reacting to significant geopolitical developments.
Read more: Middle East Enters Risky New Phase Following Iran's Strike on Israel
David Lawant, head of research at FalconX, noted that "more investors than usual might be choosing to express their market views through crypto."
As Israel prepared for potential retaliation, the heightened tension impacted stocks on Friday, boosting havens such as bonds and the dollar. According to Coinglass data, approximately $1.5 billion in bullish crypto positions via derivatives were liquidated over Friday and Saturday, marking one of the most significant two-day liquidation events in at least six months.
Zaheer Ebtikar, founder of crypto fund Split Capital, highlighted the overwhelming impact of leverage in recent days, leading to substantial price declines in digital assets.
Stock markets across the Middle East mostly trended downwards on Sunday, with Israeli equities giving up earlier gains to trade slightly lower as of 8:36 a.m. London time.
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