Bitcoin Slides Below $63K, Diverging from Gold as Middle East Tensions Flare Up

The S&P 500 and the Nasdaq also fell on a report that Iran was preparing an imminent missile attack on Israel.

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Cryptocurrencies started the Tuesday U.S. session with a nosedive as headlines of escalating tension in the Middle East prompted investors to flee risk assets.

Bitcoin (BTC), the largest digital asset by market cap, climbed to around $64,000 during European hours before quickly tumbling to $62,500 as Axios reported the White House as having indications Iran was prepping an imminent ballistic missile attack against Israel. At press time, bitcoin was lower by about 2% over the past 24 hours to $62,700.

The broad-market digital asset benchmark CoinDesk 20 Index was down a similar amount over the same period, with ether (ETH) and solana (SOL) performing a hair better than the average and Polkadot (DOT), Uniswap (UNI), Polygon {{POL}} and Hedera (HBAR) doing somewhat worse.

Key U.S. stock indexes opened the day lower, with the S&P 500 and the tech-heavy Nasdaq down 1.2% and 2%, respectively, in the early hours of the session. Gold jumped 1.2% to $2,690 per ounce and neared its record high just above $2,700 set last week, while WTI crude oil surged 3% to $70 per barrel.

The diverging price action of gold and bitcoin highlighted the leading digital asset's high correlation with risk-on assets like stocks, not to mention gold fulfilling its traditional role as a safe-haven asset. The 30-day rolling correlation between BTC and the S&P 500 is now approaching yearly highs at 0.62, K33 Research noted in a Tuesday report.

Bitcoin's Tuesday drop was also reminiscent of the price action at the start of this current Middle East tumult nearly one year ago today, not to mention similar instances earlier this year in April and July when crypto assets knee-jerked lower in reaction to headlines from that region.

Edited by Stephen Alpher.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one ; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.

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Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one ; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

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