Bitcoin drops as Trump’s Iran remarks spark war fears
Bitcoin fell more than 3% on Wednesday as rising tensions between the US and Iran caused turmoil in digital asset markets. The price dropped to around $61,691 after US President Donald Trump said the tentative ceasefire with Iran had ended, sparking fears of renewed military conflict. Ether and Solana also dropped, following Bitcoin’s steep decline.
The decline occurred after US airstrikes on Iran, which followed attacks on commercial vessels in the Strait of Hormuz. Both nations accused each other of breaking the ceasefire. Markets had shown resilience despite Strategy Inc’s sale of $216 million in Bitcoin earlier in the week, a move that had little effect on prices.
“Bitcoin dropped quickly after Trump’s comments, as the market worries about increased fuel-linked inflation and potential rate hikes to address it,” said Caroline Mauron, co-founder of Orbit Markets. “We expect some support near $61,500, but the market is likely to remain unstable as the geopolitical and macroeconomic situations evolve.”
Brent crude climbed nearly 6% to $78.55 a barrel, while stocks continued their decline. The MSCI Asia Pacific Index fell as much as 1%, and India’s Nifty 50 Index dropped 1.5%. S&P 500 futures fell 1% as investors prepared for uncertainty.
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Bitcoin had recovered in July after a 20% decline in June, its worst month in four years. The token rose 5.5% for the month as of Wednesday. Long-term holders had also begun buying again before the latest Middle East tensions, purchasing up to 31,800 tokens daily between June 20 and July 6, according to Glassnode.
US-listed spot Bitcoin exchange-traded funds saw $500 million in inflows over three consecutive days, a sharp contrast to June’s $4.5 billion outflows. Despite this, Bitcoin is still down over 50% from its October peak above $126,000.
“A seller of that size not affecting the market is a notable signal,” said Sean Rose of Glassnode. Strategy Inc’s structural changes, including plans to repurchase $2 billion in securities, may have reduced concerns about its Bitcoin sales.
However, Bitcoin’s recovery remains weak. The Glassnode Bitcoin Risk Index dropped to 0.56 on July 6, indicating lower risk. Yet, net unrealised profit/loss now stands at 0.17, suggesting most holders have limited profit remaining.
