Bitcoin’s value fell to approximately $60,000 on Wednesday, following Iran’s missile strikes on Israel. The attacks were in retaliation for Israel’s recent killing of militant leaders and its military actions against Hezbollah in Lebanon.
Fears of a wider regional conflict involving Iran and the US have intensified as Israel continues its assault on Lebanon. As a result, Bitcoin dropped 3.1% to around $61,616 for the day, and 4.4% over the past week. The decline is primarily attributed to increasing uncertainty and heightened risk aversion in global financial markets, fueled by ongoing geopolitical tensions. Investors tend to offload riskier assets like cryptocurrencies, directly influencing Bitcoin’s price.
White House Dispatches US Military Support to Israel as Tensions Rise
As tensions escalated, the White House swiftly deployed US military support to Israel. President Joe Biden and Vice President Kamala Harris convened in the White House Situation Room to discuss the situation, sending US naval destroyers to aid Israel’s defense. Despite the interception of most Iranian missiles with the help of US military assets, several strikes made contact, according to Israeli military spokesman Daniel Hagari.
Crypto Markets React to Iran-Israel Conflict
The escalating conflict has rattled crypto markets. Mitchell Nixon, Chief Research Officer at Imperial Wealth, pointed out that Bitcoin’s current decline mirrors previous drops seen in April and July, both of which were triggered by rising Middle East tensions. These events have historically led to sell-offs in cryptocurrency markets.
On September 30, 2024, Bitcoin spot ETFs recorded net inflows of $61.2 million, marking an eight-day positive streak. However, on October 1, a sharp reversal occurred, with a substantial outflow of $242.5 million, according to SoSoValue data.
In contrast, Ethereum spot ETFs saw outflows of $822,300 on September 30, which worsened to $48.52 million the following day.
Nixon also highlighted the impact of profit-taking ahead of the upcoming Federal Open Market Committee (FOMC) meeting. According to CoinGlass data, there were significant outflows across major cryptocurrencies such as Bitcoin, Ethereum, and Solana, as sellers outnumbered buyers in the current market climate.
Despite the geopolitical concerns and the overall market downturn, Bitcoin achieved its strongest September close in over a decade, a feat not seen since before 2013.
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