The Middle East war, which began with Israel's surprise attack, is showing signs of prolonged conflict. This is due to the unexpected intervention of the United States, as Israel and Iran continue to engage in a consuming aerial battle by shooting missiles at each other.
On the morning of the 22nd, the United States deployed six B-2 strategic bombers and dropped bunker buster bombs on three major nuclear facilities in Iran, including Natanz, Ismahan, and Fordow. Once it was confirmed that the United States had directly launched an attack, the Bitcoin price instantly dropped to the $100,000 range.
The problem is that Iran, which has been attacked again, shows no signs of backing down. Even before the US attack, Iran had repeatedly stated its intention to attack US military bases in the Middle East if attacked. After this nuclear facility bombing, it appears ready to play the card of blocking the Hormuz Strait.
Currently, a significant portion of global manufacturing is dominated by East Asian countries such as China, South Korea, and Japan. These countries do not produce oil, yet 70% of their crude oil imports pass through the Hormuz Strait. In other words, if Iran actually proceeds with a blockade, it is inevitable that the world economy will be thrown into chaos. As news of the Hormuz Strait blockade becoming almost imminent emerged, the Bitcoin price dropped to the $98,000 range in the early morning of the 23rd, but then rebounded to the $101,000 range when no physical blockade measures were implemented.
Prolonged wars are typically relatively favorable for safe-haven assets. However, looking at the trend over the past week, this does not seem to be the case for Bitcoin. At the beginning of the week, inflows into Bitcoin-related products and the US market Bitcoin spot ETF were not bad.
However, as the war shows signs of prolongation, a mood of profit-taking is emerging. While the Nasdaq, another risk asset, had a weekly fluctuation of -0.02%, Bitcoin experienced a weekly price drop of -3.89%.
The altcoin decline was even more severe. Ethereum (ETH) dropped by -12.13% weekly, and Solana (SOL) recorded a slightly higher drop of -12.75%. During this period, Bitcoin spot ETF inflows were 'halved'.
This is the first time Bitcoin's price has fallen below $100,000 since April, two months after the US government declared a 'tariff war' against the world. Considering that recently listed Nasdaq companies have been adopting financial strategies to hold Bitcoin, this US attack on Iran has had a negative impact on investor sentiment comparable to a tariff bomb.
So, will Bitcoin's price continue to be difficult to rebound? Is it likely to be adjusted below $100,000, losing its upward momentum for the time being? Some experts explain that now, when retail investors' investment sentiment has frozen, is actually a positive situation. The logic is that Bitcoin's significant rises have always begun when pessimism spreads among retail investors.
In fact, Bitcoin's price decline is not yet very significant. It's less than a 4% weekly drop. Also, with the GENIUS Act stablecoin bill passing the US Senate and Circle, a stablecoin issuer listed on the New York Stock Exchange last week, showing a strong upward trend for seven days, it's not easy to think that liquidity is draining from the crypto sector overall.
However, in cryptocurrency exchanges where coin trading occurs, a liquidity shortage phenomenon centered on altcoins is clearly becoming visible. In December 2024, when Bitcoin was trading between $98,000-$100,000, the daily inflow of USDT and USDC to centralized exchanges was around $131 billion, but in June this year, this figure has dropped to around $70 billion per day.
This week, macroeconomic indicators will be released daily. On the 23rd (Monday), manufacturing and service PMI indices will be announced, and on the 24th (Tuesday), the Conference Board's consumer confidence index will be released. On the 26th (Thursday), the Q1 GDP revised figure and unemployment claims will be announced, and on the 27th (Friday), May personal consumption expenditure (PCE) and the University of Michigan consumer sentiment index will be announced.
However, rather than these routine indicators, the expansion of the Middle East war and the safety of global oil supply chains through the Hormuz Strait will likely be the most influential factors for risk asset prices. Since this war originated from Iran's nuclear development, the war will inevitably come to an end if Iran abandons its nuclear development. This will be the most critical criterion. We wish you all successful investments this week.
