Tensions in the Middle East, marked by the escalation between Iran and Israel, have caused significant capital outflows from spot Bitcoin ETFs. The cryptocurrency market is showing signs of fragility while investors seem to be protecting themselves with the dollar.
Investors avoid Bitcoin and cryptocurrencies
At the end of the year, the conflict between Iran and Israel intensified after the assassination of Hassan Nasrallah, leader of Hezbollah. In response, Iran launched 200 missiles at Israel overnight from Tuesday to Wednesday. In response, the S&P 500 and the CAC 40 fell by around 1%, despite still unclear information on the damage caused.
The cryptocurrency market was also hit, with the price of Bitcoin down almost 4%, falling just above $60,000, while the price of Ether fell 6%, leading to a widespread decline altcoins. Although technical supports have held up, an escalation could weaken them, threatening the market's uptrend.
🌍 Learn more about BTC adoption in the Middle East – The rise of Bitcoin in Iran: a response to inflation and repression
In this context, the volumes recorded by spot Bitcoin ETFs make it possible to measure the sentiment of professional and institutional investors. They recorded one of the worst days since their launch in January 2024.
US Spot Bitcoin ETF Volumes
BTC-based ETFs recorded $242 million in net outflows, the 5th worst day in their history. This performance is all the more impressive in comparison to the previous week, which recorded one of the best performances, with more than a billion incoming net flows.
Ethereum spot ETFs are suffering a similar fate, amplified by the general disinterest in ETFs on the 2nd largest cryptocurrency on the market, with more than $570 million in net outflows, including 48 million yesterday alone.
Ledger: the best solution to protect your cryptocurrencies 🔒
Where are investors heading?
In this context, even gold, a historic safe haven, does not seem to benefit from the situation. After a rapid increase of 0.6% to $2,670 following the first missiles launched by Iran, the price of the yellow metal fell by around 1%, falling to $2,645.
The price of XAU/USD, like that of BTC/USD, is experiencing a slight rebound this morning, probably while waiting for the return of professional investors to the markets.
📰 Also read in the news – Iran – Israel: Cryptocurrencies down 5% – Does the conflict in the Middle East cancel out any chance of a bull run?
Only the dollar seems to benefit from this escalation. The dollar index (DXY), up 1.2% since the end of September, has so far not been affected by tensions in the Middle Eastremaining above 101,200.
It is still too early to predict the evolution of the conflict between Iran and Israel and its repercussions on the global economy. During Russia's invasion of Ukraine in February 2022, the price of gold initially rose before falling 22% between March and September 2022..
Only the dollar had benefited from this situation, and the coming weeks will tell whether a similar dynamic will recur, or if Bitcoin could finally play its role as a store of value.
Cryptoast Academy: Don’t waste this bull run, surround yourself with experts
Source: SoSoValue
The #1 Crypto Newsletter 🍞
Receive a summary of crypto news every day by email 👌
What you need to know about affiliate links. This page may feature investment-related assets, products or services. Some links in this article may be affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you can even get a bonus using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I just have to share my knowledge and convey the passion I have for Bitcoin. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
327 items
