Bitcoin fell below $73,000 on Thursday, hitting its lowest level in more than six weeks, as renewed US military strikes on Iran sparked market anxiety and triggered a fresh sell-off in cryptocurrency markets.
The world's largest cryptocurrency last traded down 4% at $72,782.90 by 9:38 a.m., its lowest level since mid-April.
Ether, the second-largest cryptocurrency by volume, also fell by 5% to $1,975.63, its lowest level in two months.
The United States strikes Iran again, and oil prices rebound.
Investor sentiment deteriorated following reports that the United States had carried out a second round of strikes on Iran this week, weakening hopes for a near-term peace agreement and pushing oil prices higher again.
Brent crude rebounded above $97.00 a barrel after falling in the previous session amid optimism about the possibility of negotiations between Washington and Tehran.
Markets had briefly risen on Wednesday following reports in Iranian state media suggesting progress toward a framework agreement that could reopen shipping through the Strait of Hormuz. However, those hopes were dashed after US President Donald Trump dismissed reports of joint Iranian-Omani oversight of shipping operations as part of the proposed deal.
High oil prices and escalating geopolitical tensions weighed on appetite for riskier assets, including cryptocurrencies, as investors awaited US inflation data due later on Thursday, which could influence the Federal Reserve's interest rate expectations.
Bitcoin is under pressure from institutional sales.
Bitcoin came under additional pressure due to continued institutional selling and escalating outflows from spot exchange-traded funds (ETFs) linked to the digital currency.
According to data from SoSoValue, Bitcoin spot exchange-traded funds (ETFs) in the United States recorded net outflows of $733.43 million on May 27, making it one of the largest single-day withdrawals in recent weeks.
ETFs linked to cryptocurrencies saw net outflows exceeding $2.5 billion in the past two weeks. Analysts also pointed to a $1.29 billion dark market block trade linked to BlackRock Inc.'s iShares Bitcoin Trust ETF, known as IBIT, which coincided with Bitcoin's sharp reversal earlier this week.
The latest pullback extends Bitcoin's losses from levels above $82,000 earlier this month, amid growing concerns among traders that persistent inflation and rising energy prices could keep US interest rates high for longer.
Cryptocurrency prices today: Altcoins continue their sharp losses
Most alternative cryptocurrencies declined sharply on Thursday.
XRP, the world's third-largest cryptocurrency, fell 3.7% to $1.29.
Solana fell by 4%, while Cardano and Polygon each dropped by 4.5%.
In the context of meme currencies, Dogecoin fell by 4.2%.
