Bitcoin fell sharply after US President Donald Trump indicated there would be more aggressive attacks on Iran in the coming weeks, undermining expectations of an early end to the war and dragging risk assets down.
The cryptocurrency market saw a widespread decline. Bitcoin at one point dropped as much as 2.9%, trading around $66,300 at 11:15 a.m. London time. Smaller Token were hit harder, with Ether falling as much as 5.2% and Solana declining by a similar amount.
Investors pulled out of risky assets following Trump's speech, as he dampened expectations of an early end to the military conflict with Iran. The MSCI Asia-Pacific index partially reversed earlier gains, while Brent crude prices surged above $108 a barrel.
“Stock and commodity markets continue to be highly volatile in response to Trump’s latest statements on geopolitical issues,” said Caroline Mauron, co-founder of Orbit Markets. “Bitcoin is largely following the trend of the stock market, although in recent weeks it has become less sensitive to both good and bad news.”
Trump's remarks have dampened earlier optimism, after he had suggested he would consider ending a war with Iran before reopening the Strait of Hormuz – a vital shipping lane.
Bitcoin had previously demonstrated much greater resilience than many other assets amid conflict. Its price rose 2% in March, ending a five-month losing chain . Meanwhile, gold – a traditional safe-haven asset – fell more than 11% in March due to inflation concerns stemming from disruptions to Middle Eastern energy supplies.
However, demand for Bitcoin has remained under pressure since the October sell-off, which saw the price drop by approximately 45% from its peak of over $126,000. According to a report from CryptoQuant, actual demand (the difference between demand and the amount of new Bitcoin mined) was negative at around 63,000 BTC at the end of last month.
A major challenge is the lack of confidence from "whales"—investors holding large amounts of Bitcoin. According to CryptoQuant, this group has shifted to net selling and Dump a significant amount of Token throughout the past year.
“ on-chain data confirms what the price movements have shown: the market is clearly lacking confidence,” said Jasper De Maere, a trader at Wintermute. “Whales’ movement is at multi-year lows, while both institutions and retail investors are on the sidelines, waiting for clear signals about the trend, legal transparency from the Clarity Act, or easing geopolitical tensions.”
Net inflows into US-listed Bitcoin spot ETFs also turned negative on Wednesday, as investors withdrew approximately $174 million from these funds.
