Cryptocurrencies tumbled on Wednesday as rising geopolitical tensions in the Middle East dampened investor confidence. Bitcoin, the world’s largest cryptocurrency, slid back toward $60,000—a shaky start to what has historically been one of its strongest months.
As of Wednesday, Bitcoin was down by less than 1%, trading at $60,951.47, according to Coin Metrics. It had fallen as low as $60,175 late Tuesday. Meanwhile, Ether, the second-largest cryptocurrency, traded 2% lower at $2,447.19 after plunging 5% on Tuesday.
Despite Bitcoin’s slip, stocks linked to virtual currencies saw a rebound alongside the broader market. Riot Platforms and MARA Holdings, formerly known as Marathon Digital, both rose by more than 2%. Coinbase hovered just above the flat line, while Bitcoin proxy MicroStrategy gained more than 5%, reversing some of Tuesday’s losses, when both closed down 7.4% and 3.5%, respectively.
A Volatile October Looms for Crypto
This decline marks a volatile start to October, often referred to as “Uptober” by crypto enthusiasts due to Bitcoin’s historically strong performance during this time. However, rising tensions in the Middle East have thrown a wrench in the market’s expectations. On Tuesday, Iran launched a ballistic missile attack on Israel in retaliation for the recent killing of Hezbollah leader Hassan Nasrallah and an Iranian commander in Lebanon, further escalating the conflict.
“Surging unrest across the Middle East has driven oil prices higher and strengthened the U.S. dollar, casting a shadow over Bitcoin and other speculative investments,” said Chris Kline, COO and co-founder of Bitcoin IRA.
Kline also highlighted the unpredictable nature of this month for crypto assets. “While September delivered a stronger-than-expected performance for Bitcoin, October is shaping up to be much more volatile. We’re seeing delayed ripple effects from last spring’s halving event, compounded by uncertainty surrounding the U.S. election. All of this could make for a rocky ride this quarter,” he noted.
The crypto market’s movements are also impacted by global monetary policies, with central banks cutting interest rates and expanding money supplies to stimulate their economies. Additionally, a strike by members of the International Longshoremen’s Association, affecting ports on the U.S. East and Gulf Coasts, could further disrupt economic activity and weigh on investor sentiment.
“Uptober” Faces an Uncertain Future
Historically, October and November have been strong months for Bitcoin. The cryptocurrency has ended October in positive territory in all but two years since 2013, delivering an average return of nearly 23%. This consistent performance has earned the nickname “Uptober” among crypto investors.
However, Bitcoin’s struggle to break through the $70,000 ceiling continues, and while the $55,000 mark has provided solid support, many investors are questioning whether October will deliver the rally they’ve been anticipating. “Bitcoin has strong support around $55,000, but breaking the $70,000 threshold remains elusive. Investors are hopeful, but cautious,” Kline added.
As October progresses, all eyes are on whether Bitcoin can reclaim its past momentum or if geopolitical and economic uncertainty will continue to weigh heavily on its performance. The convergence of international tensions, inflationary pressures, and political shifts suggests that this could be one of the most unpredictable “Uptobers” yet.
