Morning Minute: Bitcoin Crashes, Rebounds as Iran War Begins

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s top news:

• Crypto majors dip then rebound amidst Iran War; BTC at $66k
• HYPE wins the weekend, rallying 20%+ to $30 while HIP-3 sees record OI
• Bitcoin ETFs saw $787M in net inflows last week
• US declares Anthropic as supply chain risk after negotiations on how the US could use Claud fell through
• Paradigm announced a new $1.5B fund focused on AI & Robotics

? Bitcoin Crashes, Rebounds During Early Hours of Iran War

Bitcoin was the only large liquid asset that anyone could sell when the bombs started dropping. And it only dropped 3%.

? What Happened

Early Saturday, US and Israeli forces launched coordinated missile strikes on Iran targeting nuclear, missile, and naval infrastructure.

President Trump confirmed “major combat operations” and urged Iranians to overthrow the regime.

Iran retaliated with missiles targeting Israel, Qatar, the UAE, Bahrain, and US bases in Iraq. Israeli Defense Minister Israel Katz declared a nationwide state of emergency.

Iranian state media later confirmed that Supreme Leader Ayatollah Ali Khamenei was killed in the strikes, along with 40 senior officials.

Crypto markets absorbed it all in real time.

BTC dropped from roughly $65,500 to $63,000 within hours. The total crypto market cap fell by $128B with $449M in longs liquidated.

Then, as Iranian state media confirmed Khamenei’s death, BTC shot back to $68,196 in a major recovery rally.

As of this morning, it’s back to $66,300.

Meanwhile, Hyperliquid was the surprising crypto winner of the weekend. Its HIP-3 markets set a new record in open interest, and Hyperliquid was featured in Bloomberg as the primary marketplace for those looking to trade the war.

The HYPE token rallied from $26 to $32 through weekend trading.

?️ What They’re Saying

“Bitcoin is the only large liquid asset trading 24/7, so it absorbed all the selling pressure that would normally spread across equities, bonds, and commodities. The real price discovery happens Monday when US equity markets and Bitcoin ETFs reopen.” – Hayden Hughes, Tokenize Capital

“With a lot of the leverage already cleared out and exhausted sellers, there’s only so much impact macro events can have.” – Justin d’Anethan, Arctic Digital

“Where price discovery happens when TradExchanges sleep.” – Arthur Hayes, responding to Hyperliquid’s weekend volume surge

? Why It Matters

Fear and Greed was sitting at 14. ETF flows had flipped to net sellers in February.

And then the biggest geopolitical shock in years hits on a Saturday.

BTC dropped less than 4%. That was the signal.

Heading into April 2024, when Iran first fired missiles at Israel, BTC dropped about 6%. Then over subsequent months it broke to new all-time highs. The June 2025 strike on Iranian nuclear sites pushed BTC below $100K briefly before it ripped.

The pattern is consistent: war shocks trigger sell-offs, then the macro digestion reverses them. The question this time is whether the 50%-off ATHs and bear market make it different.

Two things to monitor: the Strait of Hormuz and the ETF bid.

If Iran’s IRGC retaliates by threatening the strait, through which about 20% of global oil passes daily, you get an inflation shock that would keep the Fed on hold indefinitely and crush risk assets broadly, crypto included. Goldman Sachs is already predicting Oil will hit $100/barrel if this war goes on for 4 weeks as Trump said it might on Sunday.

On the other hand, if Khamenei’s death accelerates regime destabilization and traders read it as shortening the conflict, the relief bid continues.

Monday’s ETF flows will be the first signal.

The Hyperliquid story is the other one to watch longer term.

Its HIP-3 open interest (where TradFi assets can be trading around the clock) hit an all-time high above $1.1B. Hyperliquid infrastructure is becoming the 24/7 layer for all asset classes, not just tokens.

And it was the big winner of the weekend.

Now we wait for what’s in store this week…

? Macro Crypto and Markets

• Crypto majors fell and then rebounded on the initial Iran strike and have levelled off; BTC even at $66.3k; ETH -2% at $1,950; SOL -1% at $84
• Morpho (+5%), NEAR (+5%) and JUP (+3%) led top movers
• Oil is up 8% premarket this morning with the Straight of Hormuz closure
• Gold (+3%) and Silver (+2%) are both rallying amist the war
• HYPE rallied 13% over the weekend to $31 as Hyperliquid HIP-3 open interest set an all-time high above $1.1B and was featured in a Bloomberg headline about weekend markets
• The Department of War labeled Anthropic a “supply chain risk” and directed federal agencies to stop using its AI tools after negoations to use Claude for the Iran war fell through
• Iran’s crypto mining network is being monitored, as the regime operated between 2-5% of global Bitcoin hashrate using subsidized electricity
• Trump Media is weighing spinning off Truth Social into a separate public entity called SpinCo, which would merge with Texas Ventures III
• South Korea’s National Tax Service accidentally published unredacted Ledger seed phrases in a press release
• Minnesota lawmakers are considering a full statewide ban on crypto ATMs via HF 3642, which would make it the first US state to do so.
• Ripple introduced new funding routes for XRP Ledger development, including a new FinTech Builder Programme and university partnerships

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme majors were mostly red; DOGE -2%, SHIB -3%, PEPE -2%, TRUMP -1%, PENGU -1%, SPX -4%, FARTCOIN -2%
• WAR (+150%), Jellybean (+50%), PysopAnime (+30%) and HODL (+50%) led notable movers

? Token, Airdrop & Protocol Tracker

• One Polymarket trader banked $385K betting on a US-Israel Iran strike date every day since February 8, losing repeatedly until Saturday morning
• Meanwhile, Kalshi caught heat for not resolving its Khamenei market, leading to several comments on the matter from founder Tarek Mansour
• Crypto VC Paradigm announced a new $1.5B fund foducsed on AI, robotics and other frontier tech
• Backpack exchange explained the legal engineering behind its token-to-equity program, stating that the conversion right won’t attach to the token itself, it’ll attach to a VIP program requiring one year of staking and active trading

? What is happening in NFTs?

• NFT leaders were mostly flat over the weekend; Punks even at 29.9 ETH, Pudgy +1% at 4.5 ETH, BAYC -1% at 6 ETH; Hypurr’s -2% at 460 HYPE
• CyberKongz (+36%) led top movers