Middle East Tensions Roil Crypto Markets, Bitcoin Drops Below $73k

Cryptocurrency markets suffered steep losses on Thursday as geopolitical tensions between the U.S. and Iran intensified, triggering a broad selloff. Bitcoin (BTC) fell to a 24-hour low of $72,650, while Ethereum (ETH) dropped 4.3% to $1,982.95. Overall crypto market capitalization declined 2.8% to $2.46 trillion, with 75 of the top 100 cryptocurrencies trading in losses over 1%. U.S.-listed Bitcoin Spot ETFs saw outflows of over $700 million, with iShares Bitcoin Trust ETF (IBIT) leading at $528 million. Ethereum Spot ETFs also experienced outflows of $67 million, primarily from iShares Ethereum Trust ETF (ETHA). The exodus followed a trend of rising withdrawals, with Bitcoin ETF outflows jumping from $334 million on Tuesday to $733 million on Wednesday. The surge in crude oil prices and risk aversion due to geopolitical escalation contributed to forced liquidations, totaling $918 million—up from $326 million the prior day. Long positions accounted for $860 million of the liquidations, while short positions declined to $58 million. Trading volume spiked 12% to $104 billion amid heightened volatility. The U.S. Bureau of Economic Analysis reported a 3.3% year-over-year rise in the core PCE price index for April, matching expectations but remaining above the Federal Reserve’s 2% target. This fueled concerns about tighter monetary policy, further pressuring crypto markets. Bitcoin’s price now sits 42% below its all-time high of $126,198.07, recorded in October 2025, while Ethereum is 60% off its peak of $4,953.73 from August 2025. Market sentiment was further dampened by the latest U.S.-Iran tensions, which dimmed hopes for a peace deal. The combined effects of geopolitical risks, ETF outflows, and inflation fears led to a broad market downturn, with Bitcoin ranked 13th globally by market cap—between Meta Platforms and Samsung—and Ethereum slipping to 79th place.