Bitcoin saw a significant inflow of $1.44 billion early in the week, linked to the U.S. attack on Iran, but it ultimately concluded the week with a total of $619 million due to $829 million in outflows. This fluctuation mirrors the escalating geopolitical tensions, particularly following the attack which prompted a surge in crude oil prices—hitting $119 per barrel before retreating to $102. Experts warn that the rising oil prices put pressure on equities, which in turn negatively impacts Bitcoin as a risk asset, leading to increased selling pressure in response to heightened geopolitical risks and deteriorating market sentiment.
Bitcoin: Bitcoin is the original decentralized cryptocurrency operating on a proof-of-work blockchain, widely regarded as digital gold for its store-of-value properties. It dominated recent crypto fund inflows, particularly from U.S. investors, amid an initial bullish rally before outflows tied to geopolitical tensions and oil price pressures. Experts view its price action as aligning with risk asset behavior during equity market weakness.
Ethereum: Ethereum is a leading blockchain platform supporting smart contracts, decentralized applications, and now operating under proof-of-stake consensus. It attracted notable inflows into crypto funds last week, underscoring sustained institutional interest secondary to Bitcoin despite broader market pullbacks.
Nima Beni: Nima Beni is the founder of Bitlease, a service providing Bitcoin-backed leasing solutions. He described recent inflow and outflow patterns as typical portfolio management by institutions capturing moves early in the week before trimming risk amid geopolitical uncertainty.
Jonatan Randin: Jonatan Randin is a senior market analyst at PrimeXBT, a platform offering cryptocurrency trading and derivatives. He linked late-week outflows to heightened geopolitical risks from the Iran crisis, including Strait of Hormuz closure confirmations, prompting institutions to cut risk asset exposure.
Illia Otychenko: Illia Otychenko is the lead analyst at CEX.IO, a regulated cryptocurrency exchange serving global users. He indicated that further escalation could trigger risk aversion, leading investors to reduce holdings in volatile assets like Bitcoin.
James Butterfill: James Butterfill is the head of research at CoinShares, a digital asset investment firm that publishes weekly reports on cryptocurrency fund flows. In the latest report, he highlighted Bitcoin’s dominance in inflows alongside Ethereum and Solana gains, with XRP experiencing outflows, and noted U.S. investors driving the activity.
Georgii Verbitskii: Georgii Verbitskii is the founder of TYMIO, an app designed for cryptocurrency investing. He observed that elevated oil prices pressure U.S. equities, directly feeding into Bitcoin’s performance as it continues to act primarily as a risk asset.
Oil Market Reaction: Crude oil futures experienced a sharp surge following the incident before a partial correction over the weekend.
Risk Asset Correlation: Bitcoin exhibits asymmetric correlation with equities, declining alongside stocks during downside moves driven by macroeconomic pressures.
Geopolitical Escalation: The U.S. attack on Iran on February 28 intensified Middle East tensions, with IRGC confirming potential closure of the Strait of Hormuz.
Source: DecryptMedia
