Hamaney has passed away, and investors are concerned about "what's next"? The only market open over the weekend has shifted from "big decline" to "big rally".

The United States and Israel jointly launched a large-scale military strike, and Iran’s top leader, Khamenei, was assassinated, causing the most severe geopolitical shock in decades. In the only cryptocurrency market open over the weekend, prices sharply declined then rapidly rebounded in a “V-shape” reversal, reflecting deep investor disagreements over the conflict’s direction—whose core will be tested when global markets open on Monday.

According to CCTV News, Iran’s Supreme Leader Khamenei was killed in an attack on the morning of February 28. Israel claims that Khamenei and his senior aides, including Iran’s Defense Council Secretary Ali Shamkhani and IRGC Commander Mohammad Pakpour, all died in the airstrike.

The crypto market was the first to reflect sentiment changes—digital assets plummeted sharply after news of Israel’s airstrike on Iran, but as Iranian state media confirmed Khamenei’s death, the market quickly reversed and surged. Historical experience shows that as long as the attack is judged to be tactical and limited, initial panic is quickly absorbed. Bitcoin has already chosen to believe in a quick resolution.

Analysis suggests that Monday’s market direction depends on several key variables: whether the conflict can be quickly contained, whether oil supplies are substantially impacted, and how the political vacuum behind Khamenei evolves. Analysts and intelligence agencies have outlined three very different paths.

Crypto markets complete “V-shape” reversal, accelerating gains after official confirmation

After news of Israel’s airstrike on Iran over the weekend, digital assets like Bitcoin saw significant declines, reflecting initial market avoidance of sudden geopolitical events. Once Iran’s official media confirmed Khamenei’s death, sentiment rapidly reversed, with major digital assets significantly increasing from their lows.

This trend aligns with market patterns observed after similar shocks in recent years.

Bloomberg statistics show that during the last large-scale Israeli attack on Iran, precious metals and energy futures surged overnight, but as rhetoric eased, markets stabilized after opening. After the U.S. killed IRGC General Suleimani in January 2020, crude oil and gold futures briefly soared, then the major stock indices stabilized within days. The common pattern in these precedents is: as long as the attack is deemed tactical and limited, initial panic is quickly absorbed.

However, Bloomberg macro strategist Michael Baur points out that this situation has significant structural differences. Trump’s clear statement that “once the action is over, Iran should take back control of the government” has fundamentally changed the market’s reliance on the “limited strike” narrative, making it difficult for investors to simply apply past pricing models.

Three scenarios: core disagreement over whether the war will be prolonged

Analysts categorize Monday’s market outlook into three main scenarios, with the core disagreement centered on whether this military action is a one-time precise strike or the beginning of a prolonged conflict.

Scenario 1: Rapid convergence, quick digestion of impact.

If Iran’s retaliation remains limited, and shipping through the Strait of Hormuz remains open, investors may interpret this strike as a “decisive” rather than “destabilizing” action.

In this case, crude oil and gold will briefly spike then stabilize, with buying opportunities at lower levels. Mid-week narratives will shift back to earnings season, AI, and Federal Reserve policies. Historical precedents include the market reactions after the January 2020 Suleimani killing and Israel’s “Lions’ Den” operation and the U.S. “Midnight Hammer” strike last year.

Scenario 2: Escalation of conflict, risk premium reassessment.

If the operation evolves into a multi-front attrition war, with proxy forces activated in Lebanon, Iraq, Syria, or Iran attempting to block the Strait of Hormuz or attack regional energy infrastructure, markets will face a fundamental re-pricing.

Bloomberg strategist Michael Baur warns this would significantly widen uncertainty, push oil prices and inflation expectations higher, and force global risk premiums to reflect a more uncertain growth and inflation environment, rather than a short-term tradable shock.

Scenario 3: Multiple pressures combined, systemic risk rising.

If energy prices soar, boosting inflation expectations, and U.S. Treasury yields rise while growth expectations decline, a stagflation scenario—difficult for markets to digest—may emerge.

This is not isolated—last week’s unexpectedly strong Producer Price Index (PPI) data in the U.S. constrained the Fed’s easing space; early cracks appeared in private credit markets, with bank stocks heavily sold off. Analysts note that at current high valuation levels—Shiller P/E around 40—multiple pressures will severely limit market tolerance. Once liquidity events trigger, correlations among assets will tend toward one.

Uncertain regime change, intelligence community divided on key assessments

According to Xinhua News Agency, Iran’s media reported that after the death of Supreme Leader Khamenei, the country will be led by President Raisi, the Minister of Justice, and a constitutional guardian committee legal scholar. Trump stated that the U.S. “progressed smoothly” in the airstrike and that a diplomatic solution remains “easily” achievable. He already has a “suitable person” in mind to take control of Iran’s government.

U.S. intelligence agencies had studied multiple political scenarios before the strike. Several assessments indicate a significant gap between the political objectives set for this attack and the actual subsequent control the U.S. can exert.

According to The New York Times, one assessment suggests that a complete regime change in Iran is unlikely; instead, IRGC members may strengthen control over the regime, possibly willing to limit the country’s nuclear program or adopt a more conciliatory stance toward the U.S. Intelligence also believes that organized opposition forces within and outside Iran remain relatively weak.

Senate Intelligence Committee Chairman Democrat Mark Warner warned that he has not seen any new intelligence indicating a reduced difficulty in regime change. He also pointed out that while Khamenei has persisted in advancing nuclear enrichment, he has not yet decided to move toward actual nuclear weapons production, and his successor might change this stance—raising the risk of nuclear threats rather than reducing them. Intelligence assessments also show that whoever officially succeeds as religious leader will likely be a hardliner, but their actual influence remains uncertain.

Former Rand researcher Alireza Nader also stated that U.S. and Israeli war planners may have underestimated the resilience of the Iranian regime and its capacity to cause significant harm.

Risk warning and disclaimer

Market risks are inherent; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest at your own risk.