Bitcoin took a hard hit over the weekend, dipping to its lowest value since May as global tensions and inflation concerns shook investor confidence. The decline was part of a wider slump in digital currencies, with the entire crypto market reacting swiftly to escalating geopolitical risks.
On Sunday, Bitcoin slipped beneath the $99,000 threshold for the first time in over a month. Ether also took a hit, plunging more than 10%. Other major digital currencies, including dogecoin, Solana, and XRP followed suit, all experiencing significant drops that pulled the crypto sector broadly into the red.
There was a modest rebound later in the day. Bitcoin had recovered some ground, trading just below $101,000, down about 1% over the last 24 hours. Ether had also recouped a portion of its earlier losses, sitting at around $2,200, down 2.5%.
The sudden crash seems to have been triggered by both geopolitical uncertainty and growing anxiety over inflation. Reports surfaced that Iran might attempt to shut down the Strait of Hormuz, a crucial channel responsible for transporting close to a fifth of the world’s oil. According to JPMorgan, a complete shutdown could send oil prices soaring to $130 per barrel.
Such a spike in oil costs could reignite inflation in the United States, possibly pushing it back to 5 percent—a level last seen in March 2023 when the Federal Reserve was still increasing interest rates. That prospect has caused traders to reconsider the likely trajectory of rate cuts, shifting capital away from riskier investments like cryptocurrencies.
Although Bitcoin is often marketed as a hedge against inflation, its recent performance suggests it’s acting more like a volatile tech stock than a safe store of value. Data from crypto analytics firm Kaiko reveals that Bitcoin’s connection to Nasdaq has grown significantly over the past few weeks, reversing the disconnect seen earlier this year during a period of heavy investment into Bitcoin spot ETFs.
Institutional investor behavior has also shifted. Between Monday and Wednesday last week, Bitcoin spot ETFs saw over $1 billion in inflows. But that momentum stalled, and by Thursday, net inflows had flatlined. Friday saw a modest $6.4 million added—just as President Donald Trump left the G7 summit early and the U.S. announced a two-week analysis of its Iran policy.
Technical factors further worsened the sell-off. Bitcoin’s dip below $99,000 triggered automatic liquidations across major offshore trading platforms like Bybit and Binance. In just 24 hours, over $1 billion in cryptocurrency positions were wiped out, most of them long positions, highlighting how unprepared the market was for the weekend downturn.
It remains to be seen how the recent volatility in the crypto market will impact the forecasts of industry players like BitFuFu Inc. (NASDAQ: FUFU) over the coming months.
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