Bitcoin moved lower on Monday as renewed fighting between the United States and Iran pushed investors away from speculative assets.
The world’s largest cryptocurrency fell 1.8% to around $62,853 by 00:26 ET, or 04:26 GMT.
Bitcoin Price Falls as Risk Appetite Weakens
The wider cryptocurrency market also declined on Monday.
Most major digital assets extended losses from the weekend and remained close to their weakest levels of the year.
Investors continued to reduce exposure to volatile assets as geopolitical uncertainty increased.
U.S.-Iran Tensions Pressure Crypto Markets
Bitcoin came under fresh selling pressure after the United States and Iran exchanged another round of attacks over the weekend.
The two countries also issued conflicting statements about the Strait of Hormuz.
U.S. officials said the critical shipping route remained open. Iran, however, claimed that access through the strait was largely restricted.
The uncertainty surrounding the waterway increased fears of further disruption to global energy supplies.
Higher Oil Prices Raise Inflation Concerns
Oil prices rose sharply following the latest developments.
The increase renewed concerns that higher energy costs could push inflation upwards in the United States and other major economies.
A fresh inflation surge could encourage central banks to keep interest rates elevated for longer.
This outlook has weighed heavily on cryptocurrencies since the beginning of the U.S.-Iran conflict.
Higher Interest Rates Reduce Crypto Appeal
Bitcoin and other cryptocurrencies do not generate income or interest.
As a result, they can become less attractive when government bonds and other lower-risk investments offer higher returns.
The possibility of prolonged restrictive monetary policy has therefore reduced demand for speculative digital assets.
Bitcoin Remains Far Below Its Record High
Bitcoin continued to trade roughly 50% below its October record high.
Wider sentiment towards the cryptocurrency sector remained weak.
Growing investor interest in artificial intelligence stocks also appeared to divert capital away from digital assets.
Bitcoin ETFs Record Continued Outflows
Data from SoSoValue showed that Bitcoin exchange-traded funds had experienced eight consecutive weeks of net capital outflows.
The trend suggested that institutional demand for Bitcoin had weakened significantly.
Persistent ETF outflows can place additional pressure on the market by reducing one of the main sources of large-scale crypto demand.
Regulatory Uncertainty Adds More Pressure
The cryptocurrency sector also lacked positive regulatory developments.
In previous periods, progress on U.S. crypto legislation had helped improve market sentiment.
However, the Clarity Act remained stalled in Congress, creating further uncertainty for investors.
Ether, XRP and Major Altcoins Decline
Ether, the world’s second-largest cryptocurrency, fell 1.1% to around $1,783.
XRP declined 1.7%.
Solana, Cardano and BNB recorded losses ranging between 0.2% and 3%.
The widespread decline showed that weakness extended well beyond Bitcoin.
Dogecoin and TRUMP Memecoin Move Lower
Memecoins also came under pressure.
Dogecoin fell 1.2%, while the TRUMP token declined 2.2%.
The losses reflected a broader retreat from higher-risk corners of the cryptocurrency market.
Crypto Outlook Remains Cautious
The near-term outlook for Bitcoin will likely depend on developments in the Middle East, oil prices and global interest-rate expectations.
Any further escalation could increase demand for safer assets and place additional pressure on crypto prices.
However, signs of diplomatic progress or renewed institutional inflows could help improve sentiment.
