Bitcoin tumbles nearly 8%, at $63,000 from Mar-Apr high amid Israel-Iran crisis

Bitcoin down: Bitcoin slumped 7.9 percent to $61,842 at 21:00 GMT on April 13 after news of Iran’s retaliatory drone strikes on Israel broke out, Reuters reported.

The world’s largest cryptocurrency by market capitalisation, lost $5,308 from its previous close last evening. It pared some losses by the morning of April 14 to settle in the $63,000 range, data on CoinDesk showed.

Notably, Bitcoin is down 16.2 percent or $10,000 from its year’s high of $73,794 recorded on March 14. This was largely backed by demand for United States bitcoin exchange-traded funds (ETFs).

Cryptocurrencies Hit Across the Board

Second-largest crypto by market cap Ether fell 9.18 percent to $2,930 on April 13. The coin which is linked to the Ethereum blockchain network lost $296.1 from its previous close. Other major coins such as Dogecoin and Solana also took hits to their prices.

The CoinDesk 20 Index slipped 10 percent, with Cardano’s ADA, Avalanche’s AVAX, bitcoin cash, filecoin and aptos all slumping 15-20 percent, as per CoinDesk data.

Tensions in the Middle East Keeping Markets on Edge

The fall in crypto prices reflects risk aversion amid a spiking geopolitical crisis in the Middle East, as per a Bloomberg report. Digital asset trade remains open during the weekend, and there could be a change in the situation between now and April 15 (Monday), when the stock market will reopen, it added.

Zaheer Ebtikar, founder of crypto fund Split Capital told the publication the crypto sell-off would continue “contingent on further escalation” and people would wait to see how markets react before making more moves. “Leverage has gotten completely overwhelmed in the last three days, so that’s caused prices to materially deteriorate in digital assets,” he added.

Coinglass data show about $1.5 billion of bullish crypto wagers via derivatives were liquidated on April 12 and 13. This is among the largest two-day liquidations in at least six months, the Bloomberg report added.

In financial markets, Treasury bonds and the US Dollar Index saw significant increases as traders sought safe investments. Key US stock market indicators — the S&P500 and Nasdaq 100, dropped by 1.7 percent just an hour before the trading session’s end.

Gold, often seen as a safe haven in times of uncertainty, reached a new record high, surpassing $2,400, before retracting some gains. Additionally, oil prices rose by 1 percent.

In what could be a positive turn, investors in the crypto market are eagerly anticipating the upcoming Bitcoin halving, set to occur around April 20. This event will halve the rate at which new bitcoins are produced. Historically, such halving events have led to increased prices for Bitcoin. However, doubts are emerging about whether this pattern will repeat, especially as Bitcoin recently reached a new peak in its value.

(With inputs from Bloomberg and Reuters)

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Published: 14 Apr 2024, 10:22 AM IST

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