Bitcoin Price Plunges Following Iran's Missile Strikes on Israel
By Vukan Ljubojevic | TH3FUS3 Senior Writer
October 2, 2024 10:37 AM
Reading time: 1 minute, 48 seconds
TL;DR Bitcoin dropped to around $60,000 Wednesday following Iran's missile strikes on Israel. The strikes were in retaliation for Israel's killing of militant leaders and its aggression in Lebanon against Hezbollah. Concerns about a broader regional war involving Iran and the US have grown as Israel escalates its assault on Lebanon.
Bitcoin Drops Amid Geopolitical Tensions
Bitcoin saw a notable decline, falling to around $60,000 on Wednesday. This drop followed a sequence of missile strikes by Iran on Israel. These strikes were a direct retaliation for Israel's recent actions.
Israel had targeted militant leaders and heightened aggression in Lebanon against Hezbollah.
Concerns are rising about a potential broader regional conflict. Israel's escalated assault on Lebanon has sparked fears of involvement from Iran and the United States. These geopolitical tensions have directly impacted financial markets, causing increased risk aversion among investors.
Market Reactions
Bitcoin fell by 3.1% on the day, reaching about $61,616. Over the past week, it has dropped 4.4%. This decline is primarily due to the growing uncertainty in global markets. Investors tend to sell off riskier assets like cryptocurrencies during such times, directly affecting Bitcoin's price.
"The current Bitcoin decline mirrors past drops in April and July, both triggered by rising tensions in the Middle East," said Mitchell Nixon, chief research officer at Imperial Wealth.
US Military Support
The gravity of the situation was underscored by actions from the White House. President Joe Biden and Vice President Kamala Harris convened in the White House Situation Room.
Reports indicate they dispatched US military support to bolster Israel's defenses. US naval destroyers played a critical role in intercepting most of the Iranian missiles, though a few did hit their targets, according to Israeli military spokesman Daniel Hagari.
Crypto Market Dynamics
The crypto market has responded sharply to these geopolitical developments. On Sept. 30, 2024, Bitcoin spot ETFs recorded net inflows of $61.2 million, maintaining an 8-day positive streak. However, this trend reversed on Oct. 1, with substantial outflows amounting to $242.5 million, as per data from SoSoValue.
Ethereum saw a similar trend. Spot ETFs ended Sept. 30 with an outflow of $822,300, which surged to $48.52 million the next day. Nixon observed that traders were also securing profits ahead of the upcoming Federal Open Market Committee meeting.
Data from CoinGlass revealed significant outflows from major cryptocurrencies like Bitcoin, Ethereum, and Solana, with sellers outnumbering buyers.
Despite the turbulent market and geopolitical concerns, Nixon noted an interesting fact. Bitcoin marked its strongest September close in over a decade, a milestone not seen since before 2013.