The price of Bitcoin has reportedly dropped by 3.6% in the last 24 hours, trading at $61,687 as of 03:37 a.m. EST, with trading volume surging 40%.
The decline in the crypto asset comes after Iran launched an unprecedented attack against Israel, firing a barrage of missiles at the country in the latest escalation amid weeks of soaring violence and tensions in the Middle East.
In response to Iran’s attack, Israeli Prime Minister Benjamin Netanyahu has vowed retaliation, heightening tensions in the region. Netanyahu warned that Tehran would “pay a price” after firing around 200 ballistic missiles at Israel.
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While Bitcoin is often seen as a decentralized asset, it is not immune to broader global events that influence investor sentiment. The conflict between Israel and Iran has undoubtedly contributed to the decline in the price of the crypto asset as rising tensions have spurred investors to be risk-averse, which has seen a significant amount of them selling off their assets.
Due to the conflict, Bitcoin and the US S&P 500 index fell 3.98% and 0.84%, respectively,as investors flew towards safe-haven assets like Gold, which rose more than 1% on the day.
Bitcoin’s price drop triggered a wave of liquidations across the crypto market, resulting in over $500 million in total liquidations and more than $140 million specifically in BTC, according to data from CoinGlass.
Expressing concern amid the ongoing conflict and its impact on the price of Bitcoin, a crypto trader on X, @btcycle007 wrote,
“I’m a bull. But this conflict is a strong cup of coffee. The involvement of other countries in the war, and the escalation of the war are from today a very real part of the long-term conflict between Israel and Iran. It is now impossible to predict the price movement of Bitcoin. The base is too strong and CK has no chance here. Within 48 hours we will roughly see the development of the conflict and also the movement of the market. I’ve been predicting a weak October on the market for two weeks now, but this could be a game changer.”
Bitcoin which resumed its upward trajectory in September 2024, has seen its Price Currently in a bearish trend, trading at $60,904 as of the time of writing this report. The crypto asset had however been on a bullish trend throughout September, rising from a $53,700 support level to reach $66,500. Despite September historically being a weak month for the cryptocurrency market, Bitcoin was up more than 10% this year and is on track to achieve the second-best September in the past 13 years
Institutional demand is reported to have played a significant role in Bitcoin’s rally last month, with major asset managers like BlackRock and Fidelity Investments recording significant increases in their holdings following the rate cuts. Spot Bitcoin ETFs saw inflows of $365 million this week, the highest in over two months, indicating a sustained appetite from investors seeking exposure to the digital asset.
Notably, the demand for Bitcoin ETFs has surged as investors seek alternatives to traditional assets amidst economic uncertainty. Many institutions are positioning themselves ahead of potential Federal Reserve interest rate cuts expected later this year.