Crypto market stumbles as Bitcoin falls to $60,000 amid Middle East conflict
Representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. (Reuters Photo)
The cryptocurrency market experienced a significant downturn on Tuesday evening, with Bitcoin dropping to the $60,000 level. This decline comes at the start of what has historically been one of the strongest months for the leading digital currency.
As of late Tuesday, Bitcoin was trading at $60,972.62, down nearly 4% according to Coin Metrics. The flagship cryptocurrency briefly dipped to $60,175 around 4:45 p.m. Eastern time. Ethereum, the second-largest cryptocurrency by market capitalization, also felt the pressure, falling more than 5% to $2,449.83.
The ripple effects of this downturn were felt beyond the crypto sphere, with stocks related to digital currencies also taking a hit in extended trading. Coinbase, a major cryptocurrency exchange, saw its stock drop about 1%, while MicroStrategy, often considered a Bitcoin proxy, lost 2% after hours.
Chris Kline, chief operating officer and co-founder of Bitcoin IRA, attributed the market’s weakness to geopolitical factors. “Surging unrest across the Middle East has propelled oil prices upward and reinforced the dollar’s strength, casting a shadow over bitcoin and other speculative investments,” Kline stated.
The decline coincides with escalating tensions in the Middle East, following Iran’s ballistic missile attack on Israel in retaliation for recent events in Lebanon. This geopolitical uncertainty has dampened investors’ risk appetite across various asset classes.
Despite October’s reputation in the crypto community as “Uptober” due to historically strong performance, some investors are questioning whether this trend will hold true this year. Bitcoin has struggled to break through the $70,000 ceiling, though it has found strong support at the $55,000 level.
Adding to the market’s challenges, investors are also monitoring a strike by members of the International Longshoremen’s Association on the East and Gulf Coasts, which could potentially impact the U.S. economy depending on its duration.
