Israeli warplanes struck residential buildings in southern Lebanon and the suburbs of Beirut between June 14-17, killing at least four people and possibly as many as eight. The timing could not have been worse for markets. The strikes landed just days after the US and Iran signed a memorandum of understanding designed to de-escalate the very kind of hostility that was now playing out in real time.

Bitcoin fell over 2% to roughly $63,000. Ethereum slipped below $1,700. And more than $1 billion in leveraged crypto positions were liquidated as traders scrambled to reduce exposure to what suddenly looked like a much riskier world.

What happened on the ground

Israel justified the airstrikes by identifying the targeted…