Bitcoin fell to its lowest level in more than two months on Wednesday, extending its sharp losses following a sell-off by Strategy, the largest institutional holder of the digital currency, which sent widespread bearish signals to the markets.
Growing concerns about the US-Iran conflict, amid renewed military action between the two sides, have also kept appetite for the broader cryptocurrency markets largely restrained.
Bitcoin fell as much as 6% to $65,485.20, its weakest level since late March. The world's largest cryptocurrency partially recovered to trade at $66,855.30 by 4:33 AM Saudi time.
Strategy sell-off disrupts Bitcoin and ETF outflows continue
Strategy Inc (NASDAQ:MSTR) revealed on Monday that it sold 32 units of Bitcoin during the period from May 26 to May 31 at an average price of $77,135.00 per coin, generating revenues of $2.5 million.
Although this deal represents a small fraction of Strategy's total Bitcoin holdings, it sent bearish signals to markets that were already on edge due to the fragility of cryptocurrency prices.
Strategy shares fell to their lowest level in nearly two months following the sell-off.
Liquidity has also been observed leaving the cryptocurrency markets in anticipation of a massive initial public offering expected from SpaceX, likely to take place next week.
Cryptocurrencies appeared to be losing their appeal to investors as the market's focus shifted towards artificial intelligence stocks amid growing optimism about the prospects of this rapidly growing technology.
This was also evident in Bitcoin-linked exchange-traded funds (ETFs), which have seen continuous capital outflows after losing more than $3 billion in the past three weeks.
Data from SoSoValue showed that Bitcoin ETFs saw outflows of nearly $1 billion on Monday and Tuesday, marking the twelfth consecutive day of outflows.
Cryptocurrency prices today: Altcoins plunge amid Bitcoin losses and Iranian tensions
Prices of broader cryptocurrencies fell in line with Bitcoin's losses, as risk aversion intensified amid ongoing tensions between the United States and Iran.
Ether, the world's second-largest cryptocurrency, fell 5.5% to $1,874.00, while XRP declined 2.5% to $1.23.
Solana, Cardano, and BNB all declined between 2% and 6%. In the world of meme cryptocurrencies, Dogecoin fell by 5.4%, while $TRUMP dropped by 0.3%.
The United States and Iran exchanged strikes on Tuesday, the third such exchange in the past week.
These strikes came in the wake of reports that Iran had backed out of indirect negotiations with the United States.
US officials have confirmed that talks with Iran are ongoing and that a peace agreement is imminent. However, Iranian media reports indicate that Tehran has not held any new dialogue with the United States this week.
Oil prices have risen sharply this week, keeping markets on edge over the economic fallout of a war with Iran.
