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Bitcoin Slides Below $63,000 as Geopolitical Tensions and Fed Uncertainty Weigh on Markets
Bitcoin (BTC) fell more than 2% on Wednesday, slipping below the $63,000 level as a sharp escalation in U.S.-Iran military tensions and hawkish undertones from the latest Federal Reserve meeting minutes soured investor risk appetite.
The leading cryptocurrency traded at $62,115.3 by late afternoon trading in New York, a 2.1% decline, after touching highs above $64,600 earlier in the week, according to data from Investing.com.
Geopolitical Tensions Spark Risk-Off Sentiment
Market sentiment soured after the U.S. military launched retaliatory strikes against Iran following attacks on commercial oil tankers. Iran responded with strikes of its own, prompting U.S. President Donald Trump to state at a NATO summit that a recent ceasefire was now "over."
The U.S. also revoked a license that permitted the production and sale of Iranian oil. The escalation triggered a classic flight-to-safety trade, with investors moving away from speculative assets like cryptocurrencies. The heightened risk was reflected in commodity markets, where Brent crude futures briefly topped $80 a barrel.
Fed Minutes Signal Hawkish Divide
Adding to market pressure, minutes from the Federal Reserve's June 16-17 meeting revealed significant uncertainty and an evenly divided debate among policymakers regarding the future of interest rates. The summary noted that while many officials expect inflation to cool, a few argued for raising interest rates immediately.
AdThe minutes explicitly mentioned that inflation could remain elevated due to factors including the Middle East conflict. A higher interest rate environment typically increases the opportunity cost of holding non-yielding assets like Bitcoin, placing downward pressure on its price.
Broader Crypto Market Declines
Most major alternative cryptocurrencies, or altcoins, tracked Bitcoin's losses on Wednesday. Key market movements included:
- Ethereum (ETH): Down 2.1% to $1,735.98
- XRP: Down 2.2% to $1.0888
- Solana (SOL): Down 4.5%
Despite the daily price drop, institutional demand showed some signs of resilience. According to data from SoSoValue, U.S.-listed spot Bitcoin exchange-traded funds (ETFs) recorded three consecutive days of net inflows as of Tuesday, partially offsetting heavy withdrawals from previous weeks.