Global equities and risk assets such as bitcoin took a hit Tuesday as Iran launched missiles on key Israeli locations, with the latter threatening retaliation in the coming days.
Tensions in the Middle East pushed down BTC during the first half of Asia trading hours Wednesday.
The CoinDesk 20, a measure of the most liquid digital assets, had its worst drop in weeks.
Bitcoin (BTC) rose above $61,500 in Asian morning hours Wednesday after sliding to as low as $60,300 late Tuesday as a Middle East conflict grows, denting hopes for a rally in the assetâs historically most bullish month.
Iran fired about 200 ballistic missiles at Israel on Tuesday, threatening a fresh round of attacks as Prime Minister Benjamin Netanyahu vowed to retaliate. The strike was in response to Israel first carrying out a series of attacks on Lebanon in the past weeks.
BTC fell the most in over a month, while gold rose, with the drop reaching 6% at one point and 24-hour losses at 3.5%. That was the worst start for the assetâs historically most bullish month, Presto Research traders wrote in a note Wednesday.
Polymarket bettors are giving a 49% chance that Israel will retaliate against Iran by the end of the week.
âHistorically, October has been a strong month for BTC with only two losing years out of the last 11,â Presto said. It pointed out goldâs outperformance in the past 24 hours as a measure of the different maturity levels of both assets.
âLast nightâs BTC price action (BTC -4% vs. gold +0.8%) in the aftermath of Iranâs attack in May puzzling, esp. considering BlackRockâs recent pitch for BTC as a risk-off asset similar to gold,â researchers led by Peter Chung wrote. âThe reality is that the difference in these two assetsâ short-term price actions reflects their different maturity phases.â
The broad-based CoinDesk 20 (CD20) fell 4.7%, its worst drop in recent weeks.
âGold is a much more mature asset, with a 5,000 year history as a store of value, so thereâs not much room left for incremental network effects. BTC, on the other hand, shares the same attributes that make gold a good store of value (better in many cases), but with only 15 15-year history. This means itâs in the early stages of mainstream adoption, and its narrative is still poorly understood,â they added.
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