Geopolitical tension sent crypto markets into a tailspin this week, with Bitcoin briefly dipping below $60,000 and the broader market shedding $390 billion in market capitalization — the worst week since the FTX collapse. The Fear & Greed Index plummeted to 8, signaling extreme fear, as a weekend relief rally pushed BTC back to the $63,000 handle.
Inside the $390B rout
Last week saw Bitcoin drop 17% and Ethereum fall 22%, erasing months of gains. Public companies holding Bitcoin as a treasury asset lost a combined $62 billion in market cap during the rout. The KOSPI index in South Korea crashed 8%, triggering a circuit breaker, underscoring the broad-based risk-off mood.
What sparked the slide
Fresh military strikes between Iran and Israel over the weekend pushed Bitcoin from a brief recovery at $63,700 back down below $63,000. The sell-off accelerated after BTC briefly tested sub-$60,000 levels, though a weekend relief rally helped it regain $63,000. Historically, Fear & Greed readings below 10 have often marked local bottoms before powerful rallies — but that pattern is far from guaranteed.
The yen carry trade threat
USD/JPY climbed back above 160, raising the likelihood of Japanese intervention to defend the yen. If Tokyo steps in, it could trigger a rapid unwind of carry trades — a move that has historically roiled risk assets, including crypto. The market is watching the Bank of Japan closely for any signals.
Who's moving and shaking
Strategy (formerly MicroStrategy) CEO Phuong Le backed Michael Saylor's hint that the firm may continue buying Bitcoin despite its unrealized losses. Meanwhile, BitMEX co-founder Arthur Hayes denied on-chain claims that he rebought HYPE after a large wallet withdrawal. On-chain detective ZachXBT accused Hayes of a pump-and-dump scheme involving HYPE, NEAR, ZEC, and WLD. Hayes responded that he sells to willing buyers and shares trades openly. Separately, HTX, the Justin Sun-linked exchange, delisted the Trump-backed stablecoin USD1 after World Liberty Financial froze exchange-linked wallets. HTX converted user holdings to USDT at 1:1 and suspended related pairs, warning it may pursue legal action if the freeze isn't reversed.
Regulatory progress
On a brighter note, Senator Cynthia Lummis declared victory after the Clarity Act passed committee. A full Senate vote is expected before the summer recess, though passage odds have been trimmed to 60%. The Senate vote and the Bank of Japan's next move are now the two big events that could define crypto's trajectory in the weeks ahead.
