Middle East tensions and ETF outflows spark broad crypto selloff
The crypto market slid on Thursday, with bitcoin briefly dipping below $73,000 and ether falling under $2,000, according to CoinDesk. The pullback comes as geopolitical risk in the Middle East resurfaced and heavy redemptions from U.S. spot bitcoin ETFs continued to weigh on sentiment.
U.S. spot bitcoin ETFs posted a net outflow of $733.4 million on Tuesday, the biggest single-day withdrawal since late January. Combined with Monday's $333.6 million, two-day outflows topped $1 billion. Since May 15, the products have logged eight straight sessions of net outflows totaling more than $2.6 billion. Over the same stretch, spot ether ETFs saw net outflows of $67 million.
At the time of writing, bitcoin traded near $73,260, down about 3.4% over 24 hours and at its lowest level in nearly six weeks. Ether changed hands around $1,983, slipping below $2,000 for the first time since April and pushing its year-to-date loss to roughly 33%. Major altcoins were also weaker, with solana down about 4%. HYPE, one of this year's standout performers, fell about 10% on the day even as its related ETF still recorded modest net inflows.
Volatility also picked up as roughly $6.25 billion in crypto options expired, with the largest open interest clustered around $75,000.
Risk assets broadly softened as Iran-related tensions escalated. U.S. equity futures moved lower, with Nasdaq futures down about 0.5%, while oil rose roughly 2%. Crypto posted steeper losses, underscoring its sensitivity to shifts in risk appetite.
Even with near-term pressure on prices, Jefferies said it expects the combined market capitalization of crypto-related public companies to reach $1 trillion as more firms pursue IPOs. Potential candidates cited include Payward (Kraken's parent), Securitize, Blockchain.com and Gemini.
Separately, U.S. prosecutors disclosed an insider-trading case tied to Polymarket. A Google security engineer is accused of using nonpublic search data to place bets and generate about $1.2 million in profits. Polymarket is also moving toward broader mandatory KYC as regulatory scrutiny increases.
