Bitcoin fell sharply to around $60,000 on Wednesday, October 2, 2024, following escalating tensions in the Middle East after Iran launched missile strikes on Israel. This retaliatory move by Iran came in response to Israel's recent military actions, including the killing of militant leaders and aggression toward Hezbollah in Lebanon.
The strikes fueled growing concerns about a potential regional war, which could involve Iran, Israel, and even the United States. With increasing global uncertainty and risk aversion, many investors moved away from riskier assets such as cryptocurrencies, causing Bitcoin to drop by 3.1% to $60,000. Over the past week, Bitcoin has declined by 4.4%, primarily due to the geopolitical instability.
Adding to the tension, reports from the White House indicated that the U.S. dispatched military aid to Israel to bolster its defense systems. Israeli officials, such as military spokesman Daniel Hagari, confirmed that while U.S. naval forces helped intercept most missiles, some still hit their targets.
Geopolitical Impact on Crypto Markets Mitchell Nixon, the Chief Research Officer at Imperial Wealth, noted that this Bitcoin drop mirrors previous declines in April and July when tensions in the Middle East prompted investors to sell off crypto assets.
Nixon also pointed out that Bitcoin ETFs, which had seen a positive streak of inflows amounting to $61.2 million on Sept. 30, reversed course dramatically. On Oct. 1, data from SoSoValue showed a significant outflow of $242.5 million from Bitcoin spot ETFs. Ethereum ETFs faced even worse trends, with outflows of $822,300 on Sept. 30 ballooning to $48.52 million on Oct. 1.
The Federal Open Market Committee (FOMC) meeting later this month is also prompting some traders to secure profits, further driving sell-offs. Crypto analytics firm CoinGlass reported large-scale outflows from major cryptocurrencies like Bitcoin, Ethereum, and Solana, with sellers outnumbering buyers.
Despite the tension and market declines, Nixon highlighted that Bitcoin had its strongest September close in more than a decade, a positive marker in an otherwise volatile market.
