Crypto Majors Retreat as Geopolitical Fears and Sticky Inflation Drive Risk-Off Mood
Rising Middle East tensions and renewed inflation concerns are pushing crypto investors toward safer assets, with altcoins underperforming and bitcoin holding relatively steady.
On Thursday, major cryptocurrencies fell as traders weighed the possibility of U.S. military action against Iran and a more persistent inflation outlook flagged by the Federal Reserve.
XRP, Cardano (ADA), and Solana (SOL) each dropped over 1% in the last 24 hours. Dogecoin (DOGE) was unchanged on the day but has plunged over 10% this week, erasing its June gains. Ether (ETH) declined 0.7% to $2,426.63, giving up its early-week momentum.
Despite broader market weakness, U.S. spot bitcoin ETFs saw strong demand, with $389 million in net inflows on Wednesday. Spot ether ETFs also attracted $19 million in fresh investment.
Mounting geopolitical risks and cautious Fed commentary are driving investors toward perceived safe havens. Fed Chair Jerome Powell warned Wednesday that tariffs and geopolitical instability could prolong inflation, adding uncertainty to the rate outlook. While the central bank held interest rates steady, Powell noted that more evidence is needed before any rate cuts.
Altcoins, typically more volatile and speculative, are often the first casualties during periods of macroeconomic stress.
Bitcoin remains range-bound around $104,000, up 13% year-to-date but failing to break out amid conflicting market signals.
“Bitcoin seems stuck between two worlds,” said FxPro analyst Alex Kuptsikevich. “It isn’t rising with risk appetite, nor is it acting like a safe-haven during geopolitical shocks like gold.”
