Bitcoin Holds Near $105,000 Despite 1.4% Drop, Geopolitical Tensions

Bitcoin (BTC) has shown resilience, hovering just below $105,000 after a slight 1.4% drop in the past 24 hours. This stability comes despite escalating tensions in the Middle East, where President Donald Trump's call for Iran’s “unconditional surrender” has heightened concerns. The perceived odds of U.S. military action against Iran have risen to 73% before August, according to prediction market Polymarket. However, analysts at crypto hedge fund QCP Capital note that Bitcoin's price action remains underpinned by continued institutional accumulation, with corporate treasuries playing a significant role. Strategy, for instance, has added over 10,000 BTC, while The Blockchain Group and other firms have also increased their holdings. This institutional support has helped Bitcoin maintain its footing, even as geopolitical risks loom.

The Senate's approval of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act has been seen as a positive development for the crypto industry. This legislation is the first major piece of crypto legislation to clear the Senate, signaling a growing acceptance of formal rules for the industry. Markets have interpreted this move as a structural win, potentially boosting confidence in the sector. Traders are also keeping a close eye on the Federal Reserve's interest-rate decision, with markets nearly certain that rates will remain unchanged. However, any surprises from the Fed could amplify the fallout from the Iran-Israel conflict, which has already impacted the crypto space. The Iranian crypto exchange Nobitex was recently hacked by a group thought to be linked to Israel, adding to the geopolitical tensions.

Despite these challenges, Bitcoin's Deribit Volatility Index (DVOL) has decreased to around 40.86, down from over 62 in early April. This suggests that while there is still uncertainty, the market is not in full-blown panic mode. The resilience of Bitcoin in the face of these geopolitical risks underscores the growing institutional interest and the potential for further regulatory progress in the U.S. As the market awaits the Federal Reserve's decision and monitors the evolving situation in the Middle East, the focus remains on how these factors will shape the future of crypto markets.