Market News

(Bloomberg) -- Bitcoin tumbled after US President Donald Trump indicated there would be harder strikes against Iran in the coming weeks, denting optimism about a quick end to the war and sending risk assets lower.

Cryptocurrencies fell across the board. Bitcoin dropped as much as 2.9% and was trading around $66,300 as of 11:15 a.m. in London. Smaller tokens took a bigger hit, with Ether down as much as 5.2% and Solana falling by a similar magnitude.

Investors pulled back from risk assets following a speech from Trump that damped hopes of an imminent end to the military conflict with Iran. MSCI’s Asia Pacific Index partly reversed Wednesday’s rally and Brent crude jumped above $108 a barrel.

“Stock and commodity markets continue to whipsaw according to Trump’s latest comments on geopolitical developments,” said Caroline Mauron, co-founder of Orbit Markets. “Bitcoin is largely following stocks’ direction, though in the past few weeks it has showed reduced sensitivity to both good and bad news.”

Trump’s comments soured the more upbeat sentiment that followed remarks earlier this week that he would consider ending the war with Iran before reopening the Strait of Hormuz, a critical trade waterway.

Bitcoin had been weathering the war better than many assets. It ended March up 2% from the previous month, snapping a five-month losing streak. Gold, normally a safe-haven asset, ended March down more than 11% amid concerns about inflation fueled by disruptions to energy supplies from the Middle East.

Still, Bitcoin demand has remained under pressure since a selloff in October, leaving the token down roughly 45% from its peak that month above $126,000. Apparent demand, which measures the extent to which demand exceeds or falls short of new Bitcoin being mined, was negative by about 63,000 as of late last month, according to a report Wednesday from CryptoQuant.

A lack of conviction among large Bitcoin holders, known as whales, has been one challenge. Those holders have turned into net sellers, according to CryptoQuant, offloading significant amounts of the token over the past year.

“Onchain data confirms what price action has been telegraphing: there’s zero conviction,” said Jasper De Maere, a trader at Wintermute. “Whale transfers hit multi-year lows while both institutions and retail sit on the sidelines, unwilling to commit capital until they get directional confirmation, regulatory clarity from the Clarity Act, or some relief on geopolitical tensions.”

Net flows to US-listed spot Bitcoin exchange-traded funds turned negative on Wednesday, with investors pulling $174 million from the funds.