Bitcoin slid to $66,000 on Wednesday after Iran reportedly launched missiles and drones toward Kuwait and Bahrain, escalating geopolitical tensions in the Middle East. The drop comes as US spot Bitcoin ETFs recorded $1.67 billion in weekly outflows, with total outflows exceeding $4 billion over the past several weeks. President Trump denied reports that the US and Iran have stopped communicating, calling them 'fake news,' but the market's reaction was immediate.
Geopolitical shock hits crypto
The selloff began after news broke of the Iranian strikes. Bitcoin, which had been trading near $72,000 earlier this week, fell sharply as traders fled risk assets. The move was broad — altcoins also took a hit, though the exact percentage varied by asset. Trump's denial of communication breakdown didn't stem the selling. The market is now pricing in a higher risk premium, with traders watching for any further escalation in the region.
ETF outflows accelerate
The weekly outflow of $1.67 billion from US spot Bitcoin ETFs is the largest since the products launched. Over the past few weeks, cumulative outflows have topped $4 billion. That's a lot of institutional money hitting the exit at once. The timing isn't great — the geopolitical jitters are compounding what was already a cautious mood. Some analysts had warned that ETF flows were slowing, but this pace is steeper than most expected.
Two very different forecasts
Peter Schiff, a longtime Bitcoin critic, predicted the selloff could push Bitcoin below $50,000 and even below $20,000. On the other end, Coinbase CEO Brian Armstrong described the selloff as temporary and predicted Bitcoin could reach $1,000,000 by 2030. He recommended at least a 5% portfolio exposure. Two starkly opposing views, but the market is currently siding more with Schiff's bearish narrative — at least for the short term.
Stablecoins and cash on the sidelines
During the selloff, demand for stablecoins surged as crypto holders sought shelter within the ecosystem rather than cashing out to fiat. Tether and USDC volumes spiked. Meanwhile, Warren Buffett indicated he is sitting on a pile of cash, comparing markets to a casino environment. That cash isn't flowing into crypto, but the stablecoin activity suggests many traders are waiting for a bottom before re-entering.
The next few days will be critical. Markets will watch for any diplomatic moves in the Middle East and whether ETF outflows slow or reverse. For now, $66,000 is the level to hold — if it breaks, the $60,000 range could be tested quickly.
