Bitcoin Drops After Israel Launches Air Strikes against Iran, Wall Street Journal Launches FUD Attack on Tether

Bitcoin is down late Friday after Israel launched air strikes against multiple military targets in Iran. The Israel Defense Force released a statement

Bitcoin fell sharply late Friday after Israel launched air strikes against multiple military targets in Iran, while the Wall Street Journal reported that Tether is being probed for potentially violating sanctions and anti-money-laundering regulations.

Bitcoin was trading at $66,183 at press time, down 0.2% over the past 24 hours, and largely flat over the past week. The world’s largest cryptocurrency reached a record high above $67,000 earlier this month.

The Israel Defense Force released a statement and video on Telegram, writing “In response to months of continuous attacks from the regime in Iran against the State of Israel—right now the Israel Defense Forces is conducting precise strikes on military targets in Iran. The regime in Iran and its proxies in the region have been relentlessly attacking Israel since October 7th—on seven fronts—including direct attacks from Iranian soil. Like every other sovereign country in the world, the State of Israel has the right and the duty to respond. Our defensive and offensive capabilities are fully mobilized. We will do whatever necessary to defend the State of Israel and the people of Israel.”

The strikes come after Iran launched drones at an Israeli-owned tanker in the Persian Gulf earlier this week, injuring two crew members and causing extensive damage to the vessel, according to Israeli officials. Israel has also accused Iran of carrying out other attacks in recent months, including a failed drone strike on an Israeli defense factory in Isfahan.

Meanwhile, the Wall Street Journal reported on Friday that Manhattan’s U.S. attorney’s office is exploring whether Tether has been used to fund or launder money tied to criminal activities like terrorism, drug trafficking, or hacking. The report, based on conversations with people familiar with the matter, also said the Treasury Department is considering sanctions due to Tether’s usage among groups sanctioned by the U.S., including organizations like Hamas and Russian arms dealers. If sanctioned, Americans would be generally restricted from interacting with Tether.

The news appeared to be putting pressure on Bitcoin, which fell to as low as $66,200 before the Israeli strikes. The cryptocurrency had been largely flat throughout the day.

Bitcoin's recent rally has been fueled by several factors, including the cryptocurrency’s increasing adoption by mainstream financial institutions and corporations. Several U.S. banks, including Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), have recently launched or expanded their cryptocurrency offerings to meet growing client demand.

Rising inflation and the Federal Reserve’s plans to raise interest rates later this year have also supported Bitcoin, as some investors are turning to the cryptocurrency as a hedge against rising prices and a potential decline in the stock market.

Bitcoin is now up more than 20% year-to-date, outperforming the S&P 500, which is up about 7% over the same period.

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