Bitcoin fell below $63,000 on Wednesday as escalating military tensions between the United States and Iran dampened investors' appetite for risk, while markets awaited the release of the minutes from the Federal Reserve's latest monetary policy meeting.
The world's largest cryptocurrency recorded a 1.2% decline in its latest trading, reaching $62,553.20 by 9:48 AM, after exceeding the $64,500 level in the previous session.
US-Iran tensions push up oil prices and put pressure on cryptocurrencies
Washington launched strikes on Iranian military targets on Tuesday, following renewed attacks by Tehran on commercial shipping in the Strait of Hormuz.
Iran responded with missile and drone strikes targeting US military installations in the Gulf region, fueling fears of a wider regional conflict and potential disruptions to global energy supplies.
Brent crude prices rose as traders priced in the risk of renewed supply disruptions through the Strait of Hormuz, bringing back to the forefront concerns that inflationary pressures could complicate the Federal Reserve's monetary policy outlook.
Markets are now focused on the minutes of the Federal Open Market Committee's June meeting, due later today, looking for clues about policymakers' views on inflation risks.
Despite Bitcoin's decline on Wednesday, institutional demand for it remained resilient, with US-listed spot exchange-traded funds (ETFs) recording three consecutive days of net inflows through Tuesday's session, according to SoSoValue data.
These inflows helped offset part of the recent wave of withdrawals and supported Bitcoin's recovery from its lowest levels recorded in late June, despite the continued overall negative weekly flows following the large withdrawals during previous sessions.
The Securities and Exchange Commission may propose a regulatory rule for cryptocurrencies this month.
The U.S. Securities and Exchange Commission (SEC) may introduce its first major regulatory rule for cryptocurrencies as early as this month, potentially easing fundraising and regulatory compliance requirements for startups operating in the sector, according to an updated regulatory agenda from the agency.
This proposal, known as Reg Crypto, is expected to provide exemptions or safe havens for certain cryptocurrency-related activities that would originally have been subject to U.S. securities laws.
This move comes as the Securities and Exchange Commission, headed by Paul Atkins, seeks to establish a clearer regulatory framework for digital assets, at a time when Congress is considering broader legislation relating to cryptocurrencies.
Cryptocurrency prices today: Altcoins continue to decline... XRP drops 4% and Cardano 7%
Most alternative cryptocurrencies declined on Wednesday, continuing their losses amid a cautious atmosphere.
Ethereum, the world's second-largest cryptocurrency, lost 1.8%, falling to $1,747.92.
XRP, the third-largest cryptocurrency by market capitalization, also fell by 4% to $1.0874.
Solana fell by 4.3%, while Cardano declined by 7%.
In the meme coin category, Dogecoin fell by 5%.
