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Bitcoin extended its recent losses on Wednesday, as the ongoing Israel-Iran conflict continued to weigh on investor sentiment and quash risk appetite. The broader cryptocurrency market also retreated, with few signs of deescalation in the conflict. Traders were also focused on potential U.S. intervention following President Donald Trump’s harsh rhetoric towards Iran.
Bitcoin fell 1.8% to $105,376.9 by 00:52 ET (04:52 GMT), after briefly dipping as low as $103,000 over the weekend. The cryptocurrency remained under pressure, as geopolitical risks dominated market sentiment.
Waning Risk Appetite Amid Israel-Iran Conflict
The biggest source of pressure on the cryptocurrency market remains the Israel-Iran conflict, which stretched into its sixth day on Wednesday. Geopolitical concerns surrounding the possibility of a U.S. military strike against Iran have added to investor uncertainty. Reports showed that the U.S. had mobilized more fighter jets to the Middle East, while President Trump continued to demand Iran’s “unconditional surrender.”
Though crypto markets are not directly impacted by geopolitical events, their speculative nature makes them vulnerable to shifts in sentiment. As the Israel-Iran conflict deepens, risk appetite in broader financial markets has diminished, contributing to a continued downturn in cryptocurrencies since last Friday.
Anticipation of Federal Reserve Meeting
The upcoming Federal Reserve interest rate decision is also keeping markets on edge. While the central bank is widely expected to leave rates unchanged at 0.5%, investors are positioning for a dovish shift in the Fed’s outlook. Weak U.S. economic data, including disappointing retail sales and industrial production figures, have fueled expectations that the Fed may take a more accommodative stance in the coming months.
Focus will be on comments from Fed Chair Jerome Powell, particularly regarding his outlook for interest rates and the broader economic environment.
U.S. Senate Passes GENIUS Act on Stablecoin Regulation
In U.S. crypto-related news, the Senate passed the GENIUS Act, a bill aimed at establishing a regulatory framework for stablecoins and their issuers. The bill passed with bipartisan support, in a 68-30 vote, and will now head to the Republican-controlled House of Representatives before it can be signed into law by Trump.
The GENIUS Act outlines specific reserve requirements for stablecoin issuers, as well as new public disclosure rules. While the bill represents a major step forward for U.S. crypto regulation, the crypto market showed little reaction, as the bill does not impose immediate changes. Investors may have been disappointed by the lack of immediate market impact.
Broader Crypto Market Performance
Broader cryptocurrency prices mirrored Bitcoin’s losses on Wednesday, with altcoins also under pressure due to fragile risk sentiment.
- Ether (ETH), the world’s second-largest cryptocurrency, fell 1.5% to $2,541.20.
- XRP dropped 2.8% to $2.1746.
- Cardano (ADA) and Solana (SOL) lost 2% and 3%, respectively.
- Among meme tokens, Dogecoin (DOGE) shed 1.2%, and $TRUMP declined 1.7%.
Bitcoin and the broader crypto market continued to face pressure on Wednesday amid geopolitical tensions and the uncertain outlook for U.S. monetary policy. The ongoing Israel-Iran conflict, coupled with the possibility of U.S. military involvement, has kept risk appetite subdued. Investors are also closely watching the Federal Reserve’s meeting, where any dovish commentary could further influence crypto market sentiment. The passing of the GENIUS Act marks progress for stablecoin regulation, but its limited immediate impact on the market left investors largely unmoved.
