Crypto Market Drops 1.6% Despite Middle East De-escalation

The crypto market experienced a downturn today, with the majority of the top 100 coins seeing price drops over the past 24 hours. The total market capitalization fell by 1.6% to $3.4 trillion. Bitcoin (BTC) and Ethereum (ETH) appreciated by less than 1% each, trading at $106,413 and $2,443, respectively. The market's reaction to the de-escalation in the Middle East led to higher-risk assets benefiting, but the market remains cautious due to persistent geopolitical risks and the potential for investors to turn away from risk assets.

Dom Harz, co-founder of Layer 2 BOB, noted that while some are focused on short-term corrections, Bitcoin, particularly Bitcoin DeFi, is ultimately on the rise. He emphasized that Bitcoin is actively maturing and entering a phase defined by institutional adoption, clearer regulation, and rapid technological progress. Institutions are not only holding Bitcoin but also putting it to work, indicating its growing utility.

Gadi Chait, Head of Investment at Xapo Bank, argued that Bitcoin's safe-haven asset status is still taking shape. Recent signals suggest it’s edging closer to being viewed as a store of value. Bitcoin’s response to recent macro shocks, such as events in the Middle East, has been notably restrained, neither tracking gold perfectly nor mirroring equity sell-offs. This suggests a shift in perception, with Bitcoin being viewed as a store of value while also reflecting its growing integration into mainstream finance.

Recent macroeconomic changes and lower geopolitical risks, specifically the announced ceasefire between Israel and Iran, boosted the crypto market. However, the fragile agreement and ongoing conflicts in the region can quickly shift and affect the markets. The developments in the region can shift quickly and affect the markets across the board equally as fast.

At the time of writing, BTC trades at $106,413. Over the last day, the price gradually increased from the daily low of $104,854 to the intraday high of $106,691. The coin has surpassed the $106,000 level. Investors now wait to see if it will break the $107,500 level next, or possibly drop below $104,000. These moves would open doors for further price rises or drops.

Ethereum is currently trading at $2,443. It jumped to the intraday high of $2,473 before decreasing to $2,428 overnight. The crypto market sentiment remained in neutral territory after exiting the fear zone yesterday. The Fear and Greed Index has increased from 47 yesterday to 48 today. The current value suggests certain uneasiness and caution in the market, though investors are not panicking.

On 24 June, when the market saw a significant uptick, US BTC spot exchange-traded funds (ETFs) recorded notable inflows. BlackRock is at the top of the list, recording $436.32 million in inflows. US ETH ETFs recorded inflows of $71.24 million. BlackRock took in $97.98 million, while Fidelity lost $26.74 million. Japanese investment firm Metaplanet raised more than $517 million on the first day of its ‘555 Million Plan’. The company plans to acquire 210,000 Bitcoin by the end of 2027, roughly 1% of the total supply. Entrepreneur Anthony Pompliano’s ProCap BTC announced that it had acquired 3,724 BTC for $386 million. This comes just days after revealing plans to go public later this year.