Global equities and risk assets like Bitcoin faced significant pressure on Tuesday, following Iran’s missile strikes on key Israeli locations. The escalation threatens to destabilize markets further in the coming days as Israel plans its retaliation.
Bitcoin Dips as Middle East Tensions Rise
Bitcoin (BTC) briefly rose above $61,500 on Wednesday morning in Asia but fell to as low as $60,300 late Tuesday. The drop came amid heightened conflict in the Middle East, which has dampened hopes for Bitcoin’s traditionally bullish October.
On Tuesday, Iran launched 200 ballistic missiles at Israel in response to Israeli attacks on Lebanon in recent weeks. Israel’s Prime Minister, Benjamin Netanyahu, has vowed to retaliate, raising fears of further escalation.
This geopolitical tension led Bitcoin to its worst performance in over a month, with a 6% drop at one point and a 3.5% decline over 24 hours. According to Presto Research, this marked the worst start to October, historically a strong month for BTC.
Gold Outperforms as Bitcoin Struggles
While Bitcoin struggled, gold gained 0.8%, highlighting the contrasting maturity levels between the two assets. Historically seen as a safe haven, gold has a 5,000-year track record as a store of value, making its performance during global crises more predictable.
Bitcoin, on the other hand, is still in its early stages of mainstream adoption, with only a 15-year history. Although it shares many attributes that make gold valuable, Bitcoin’s short-term price actions reflect its relative immaturity, especially in times of global uncertainty. Presto Research noted, “Gold’s narrative is well-established, while Bitcoin’s is still evolving.”
Broader Crypto Market Declines
The overall crypto market also took a hit. Major tokens like Dogecoin (DOGE) saw an 8% loss, while XRP, Solana (SOL), Binance Coin (BNB), and Ethereum (ETH) each dropped as much as 6%.
Smaller tokens with market caps under $2 billion were hit hardest, with Sei Network’s SEI, memecoin Floki (FLOKI), and Starknet’s STARK falling as much as 16%.
