- Bitcoin fell 0.5% to $67,135 after touching a two-month low of $65,394 earlier.
- Escalating U.S.-Iran tensions and persistent ETF outflows are driving risk-off sentiment.
- Rising expectations of a Federal Reserve rate hike add further pressure on the cryptocurrency.
Bitcoin remained under pressure on Thursday as geopolitical tensions between the U.S. and Iran escalated following an exchange of strikes, fueling risk-off sentiment across markets. The largest cryptocurrency fell 0.5% to $67,135, after hitting a two-month low of $65,394 earlier in the session, according to data from CoinGecko.
The selling was compounded by continued outflows from spot Bitcoin ETFs, which have seen net redemptions in recent days, suggesting waning institutional demand. “ETF outflows are amplifying the downside,” said a trader at a digital asset hedge fund. “When combined with macro uncertainty, it’s a double hit.”
Adding to the headwinds, markets are increasingly pricing in the possibility of a Federal Reserve interest rate hike, with futures implying a 22% chance of a quarter-point increase by July, up from 15% a week ago, according to CME FedWatch. Higher rates tend to weigh on risk assets like Bitcoin by strengthening the dollar and raising the discount rate on speculative investments.
The combination of geopolitical risk and monetary policy uncertainty has pushed Bitcoin below its 50-day moving average of $68,500, a key technical level. “Without a de-escalation in tensions or a shift in Fed rhetoric, Bitcoin could test the $65,000 support level in the coming days,” said a market strategist at a crypto brokerage.
Representatives for the Federal Reserve and the U.S. Treasury declined to comment on the impact of geopolitical events on crypto markets. Bitcoin's slide comes despite recent positive developments, including the approval of spot ETFs in Hong Kong, which have yet to stem the selling.
Correction: An earlier version of this article misstated the date of the two-month low. The correct date is May 2, 2025.