Bitcoin dropped below the $63,000 level on Wednesday as rising military tensions between the United States and Iran weakened risk appetite across global markets.
Investors also remained cautious ahead of the Federal Reserve’s latest policy meeting minutes, which are expected to offer more clues about the future path of interest rates.
The world’s largest cryptocurrency was last trading 1.2% lower at $62,553.2 by 02:48 ET. This came after Bitcoin briefly climbed above $64,500 in the previous session.
US-Iran Tensions Pressure Crypto Markets
Fresh tensions between Washington and Tehran weighed on crypto sentiment.
The U.S. launched strikes on Iranian military targets on Tuesday after Iran renewed attacks on commercial ships in the Strait of Hormuz.
Iran then responded with missile and drone attacks aimed at U.S. military facilities in the Gulf. This raised concerns about a wider regional conflict and possible disruptions to global energy supplies.
Oil Prices Rise as Hormuz Risks Return
Brent crude moved higher as traders priced in the risk of supply disruptions through the Strait of Hormuz.
The key shipping route is vital for global oil markets. Therefore, any threat to vessels in the area can quickly push energy prices higher.
Rising oil prices also brought inflation concerns back into focus. This could make the Federal Reserve’s policy outlook more complicated in the coming months.
Fed Minutes in Focus
Markets are now waiting for the Federal Open Market Committee’s June meeting minutes, due later on Wednesday.
Investors will be looking for signs of how policymakers view inflation, interest rates, and the broader economic outlook.
Any indication that inflation risks remain high could weigh further on risk assets, including Bitcoin and other cryptocurrencies.
Bitcoin ETF Demand Remains Strong
Despite the latest decline in Bitcoin’s price, institutional demand remained steady.
U.S.-listed spot Bitcoin exchange-traded funds recorded three straight days of net inflows on Tuesday, according to SoSoValue data.
These inflows helped Bitcoin recover from its late-June lows. However, weekly flows remained negative overall after heavy withdrawals in previous sessions.
SEC Could Propose New Crypto Rule
The U.S. Securities and Exchange Commission could introduce its first major crypto rule as early as this month.
According to the agency’s updated rulemaking agenda, the proposal could ease some fundraising and regulatory requirements for crypto startups.
The proposal, known as “Reg Crypto,” is expected to offer exemptions or safe harbors for certain crypto-related activities that may otherwise fall under U.S. securities laws.
The move comes as the SEC, under Chair Paul Atkins, works toward a clearer regulatory framework for digital assets. At the same time, Congress is considering broader cryptocurrency legislation.
Altcoins Fall as Market Caution Grows
Most major altcoins also moved lower on Wednesday as traders remained cautious.
Ethereum, the world’s second-largest cryptocurrency, fell 1.8% to $1,747.92.
XRP dropped 4% to $1.0874, while Solana slipped 4.3%. Cardano saw a sharper decline, falling 7%.
Among meme tokens, Dogecoin lost around 5%.
Crypto Market Outlook
Bitcoin remains under pressure as geopolitical risks, oil prices, and Federal Reserve policy expectations drive market sentiment.
For now, traders are watching the Strait of Hormuz, U.S.-Iran tensions, Bitcoin ETF flows, and the Fed minutes for the next major signal.
If risk appetite weakens further, crypto markets could remain volatile in the short term.
