- 11 spot Bitcoin exchange-traded funds ($BTC ETFs) witnessed combined outflows of $242.6M after Iran fired missiles at Israel yesterday.
- Other major cryptocurrencies have been affected by the unrest in the Middle East.
- The unsettling news underscores geopolitical events’ influence on the crypto market.
Investors concerned over rising tensions in the Middle East quickly pulled their capital out of $BTC ETFs and leading cryptocurrencies.
When conflict arises, investors often seek more stable investments (like gold or bonds).
Yesterday was the second time Iran launched hundreds of missiles at Israel (after an initial strike in April). Shortly after, 11 spot $BTC ETFs witnessed outflows amounting to a hefty $242.6M.
Many digital assets have taken a turn for the worst, showing the crypto market’s sensitivity to geopolitical events.
$BTC ETFs Witness Third-Largest Outflows in 5 Months
Iran fired missiles at Israel in retaliation to the deaths of leading Iranian figures (including Hezbollah chief Hassan Nasrallah and IRGC commander Abbas Nilforoshan).
On the same day (October 1), US spot $BTC ETFs witnessed their third-largest outflows in five months, backtracking an eight-day streak of inflows clocking $494M on September 27.
It marks the most significant run of outflows since September 3, when nearly $288M left the exchange-traded funds.
Fidelity Wise Origin Bitcoin Funds ($FBTC) was hit the hardest, losing $144.7M. ARK 21Shares Bitcoin ETF ($ARKB) followed, succumbing to outflows worth $84.3M.
WisdomTree Bitcoin Fund ($BTCW), Franklin Bitcoin ETF ($EZBK), Valkyrie Bitcoin Fund ($BRRR), Invesco Galaxy Bitcoin ETF ($BTCO), and Grayscale’s Mini Bitcoin Trust ($GBTC) saw no change.
But despite the geopolitical turmoil (hence, unfavorable market conditions), BlackRock iShares Bitcoin Trust ($IBIT) continues to hold its head high. It recorded $40.8M inflows yesterday and an outflow-free day for the 15th day running.
$IBIT currently remains the largest BTC ETF with a $22.55B market cap, followed by $GBTC ($13.65B) and $FBTC ($10.97B).
$BTC Drops 6.67%, Other Leading Coins Tumble
$BTC ETFs weren’t the only digital assets impacted by the escalating war conflict. Bitcoin’s price hit its lowest value in two weeks, dropping by ~7% (from a ~$64K high to a ~$60K low). Since then, its price has spiked by ~4% (to ~$61K).
However, $BTC was ~8% greater than its value at the end of last month (~$66K). This reflects a mediocre start to ‘Uptober’ (a historically positive month for ‘risk assets’ like crypto (and stocks), representing a 22.9% uptick over the last nine years).
And as usual, when $BTC falls, others follow. Many top cryptos have been caught in the Middle East’s upheaval over the last 24 hours, including:
Macroeconomic Events Impact Crypto for Better or Worse
To show the weight geopolitical events have on the crypto market, the negative outcome due to the Israel-Iran war is in stark contrast to the Fed’s decision to cut US interest rates by 50 basis points on September 18.
Two days before the Fed slashed interest rates in half, Bitcoin’s price rose 5%, and $BTC ETFs attracted $250M in investments.
Additionally, $BTC jumped by ~12% after the favorable decision was made, and $SOL, $ETH, and $BNB appreciated by 9%, 5%, and 3%, respectively.
As evidenced by the US interest rate cut and Iran’s missile attack, global events sway crypto investors, both positively and negatively.
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Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
