Bitcoin Drops 10% Amid Israel-Iran War and Fed Meeting Anticipation

Bitcoin's price fell to $105,376.9 on Wednesday, extending recent losses as the Israel-Iran war continued to escalate, dampening risk appetite among investors. The conflict, which entered its sixth day, has kept markets on edge, with focus on whether the U.S. will directly intervene. Overnight reports indicated that the U.S. was mobilizing more jets to the Middle East, and President Donald Trump was considering a direct strike against Tehran. The speculative nature of cryptocurrencies makes them vulnerable to shifts in sentiment, leading to a steady downturn in crypto markets since Friday.

The anticipation of a Federal Reserve meeting also contributed to market volatility, although expectations of a dovish tilt from the central bank were bolstered by weak U.S. economic data. The broader crypto markets also retreated, with altcoins such as Ether, XRP, Cardano, and Solana experiencing losses. Meme tokens like Dogecoin and $TRUMP also saw declines, reflecting the overall risk-off sentiment in the market.

In the United States, the Senate passed the GENIUS Act, a bill aimed at establishing a regulatory framework for stablecoins and their issuers. The act, approved with bipartisan support, will now move to the House of Representatives before it can be signed into law by Trump. The GENIUS Act sets out guidelines for stablecoin reserves and new public disclosure requirements, marking a significant step in U.S. crypto regulation. However, the passage of the bill had little immediate impact on crypto markets, as it does not introduce any immediate changes.

The geopolitical tensions in the Middle East and the progress of the stablecoin bill in the U.S. are shaping the current dynamics of the cryptocurrency market. While the conflict has contributed to Bitcoin's price decline, the regulatory developments suggest that there could be more clarity in the future. Investors are advised to stay informed about both global events and policy changes, as these factors can significantly impact the value and stability of digital assets.