Bitcoin price today: Down to $63k amid rate fears, Iran-Israel clash

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  • Cryptocurrency News
Bitcoin price today: Down to $63k amid rate fears, Iran-Israel clash
Credit: © Reuters.

Investing.com-- Bitcoin price slid on Tuesday as risk appetite remained frail amid higher-for-longer U.S. interest rates and escalating geopolitical tensions in the Middle East, highlighted by renewed Israel-Iran conflicts.

The dollar shot up to an over five-month high this week, pressuring the broader crypto market as strong retail sales and inflation data saw traders price out expectations of early U.S. interest rate cuts.

Bitcoin fell 4.2% in the past 24 hours to $63,118.5 by 08:35 ET (12:35 GMT). Traders remained largely biased towards traditional safe havens such as the dollar and gold.

Hong Kong crypto ETF approval provides little cheer 

Weak risk appetite largely overshadowed the approval of spot crypto exchange-traded funds by Hong Kong regulators on Monday.

The move offers Hong Kong and Chinese investors some exposure to crypto markets, after cryptocurrencies were effectively banned in mainland China in 2021 over issues of gambling and market manipulation.

But while three ETF providers received approval for the products from Hong Kong regulators, they are yet to launch any offerings.

It remains to be seen whether the Hong Kong ETFs can inspire a rally in Bitcoin akin to that seen in U.S. markets earlier this year. The approval of spot U.S. ETFs had sparked a stellar rally in the world’s biggest cryptocurrency over the past two months, although capital flows were now seen slowing as enthusiasm cooled. 

Crypto price today: prices fall as crypto ETFs see outflows 

Broader cryptocurrency prices fell on Tuesday, as risk appetite remained weak amid Iran-Israel tensions, as well as the prospect of higher-for-longer U.S. interest rates. 

Ethereum fell 4.7% to $3,080.26, while XRP and Solana lost 3.9% and 10.8%, respectively.

Crypto prices had seen a flash crash over the weekend following an Iranian strike against Israel, although they recovered some ground after reports showed the damage from the attack was minimal.

But reports this week showed that Israel was now considering retaliation for the attack. 

Hotter-than-expected U.S. retail sales data saw the dollar surge to over five-month highs, while anticipation of an upcoming speech by Fed Chair Jerome Powell also kept traders on edge. 

The weak risk environment saw traders grow more hesitant towards speculative assets such as crypto.

Data from digital asset manager CoinShares also showed on Monday that crypto investment products saw outflows over the past week.

Bitcoin ETFs are fueling additional demand for the underlying cryptocurrency, brokerage firm says

Despite significant attention on the assets under management (AUM) accrued by Bitcoin ETFs, it's becoming clear that these funds are also boosting demand for the underlying cryptocurrency, brokerage firm Canaccord Genuity said in a research report Monday.

The broker further underscored this point at its 2024 Digital Assets Symposium held last Thursday, where leaders from 29 crypto-related companies were in attendance.

“It is becoming clear now that there is a material multiplier effect also underway from the ETFs in driving additional demand for the underlying BTC spot itself,” analysts led by Joseph Vafi said.

The firm said that numerous crypto investors, both institutional and retail, find the underlying spot Bitcoin more appealing than ETFs “given potentially more ways to hedge and generate yield on HODLs over time as the asset class matures.”

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