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Bitcoin Slips Below $63,100 as U.S.-Iran Tensions Fuel Risk Aversion
Bitcoin fell on Monday, trading below the $63,100 mark as heightened geopolitical risk in the Middle East prompted a broader move away from speculative assets. The world's largest cryptocurrency declined 1.2% to $63,108.4 by 06:07 ET (10:07 GMT), extending losses from the weekend and keeping prices near their lowest levels of the year, according to data from Investing.com.
Geopolitical Tensions Rattle Markets
The primary catalyst for the downturn was a fresh round of attacks between the U.S. and Iran over the weekend, which soured market sentiment. Conflicting claims from both nations regarding control over the strategic Strait of Hormuz waterway added to the uncertainty, driving oil prices sharply higher.
For crypto markets, this development poses a significant headwind. Surging energy costs can fuel inflation, potentially forcing central banks to maintain higher interest rates for longer. This environment typically reduces the appeal of non-yielding assets like cryptocurrencies, which struggle to compete with safer, interest-bearing investments.
Broad Crypto Sell-Off and Persistent Headwinds
AdThe risk-off tone was felt across the digital asset space, with most major altcoins tracking Bitcoin's decline.
- Ether (ETH) fell 1% to $1,783.46
- XRP dropped 1.5%
- Solana (SOL), Cardano (ADA), and BNB posted losses of between 0.4% and 2.5%
Beyond geopolitical factors, the crypto market continues to face other pressures. Data from SoSoValue revealed that Bitcoin exchange-traded funds (ETFs) have now seen eight consecutive weeks of capital outflows, signaling waning institutional appetite. The sector is also facing unclear regulatory developments in the U.S., as progress on key legislation like the Clarity Act has reportedly stalled in Congress.