Bitcoin dropped to $66,746 on Thursday, now sitting 47% below its all-time high of $126,210 reached in October 2025. The combination of escalating US-Iran military tensions and hawkish Federal Reserve minutes has pushed investors toward safe-haven assets like gold.
What's Happening with Bitcoin
- US-Iran tensions: the US military is reportedly ready for possible strikes on Iran as early as this Saturday
- Hawkish Fed: FOMC minutes revealed most officials believe inflation will take longer than expected to come down
- ETF bleeding: spot Bitcoin ETFs have seen over $6 billion in outflows over the past 4 months
- Ethereum struggling: ETH is fighting to hold above $2,000
Why Geopolitics Affects Bitcoin
Although Bitcoin was conceived as a decentralized asset, it behaves like a risk asset. When geopolitical uncertainty rises, institutional investors reduce exposure to volatile assets and seek safety in gold, Treasury bonds, and the US dollar.
Crude oil climbed above $66 per barrel, hitting its 2026 high, reflecting Middle East conflict risk.
The Fed Factor: Higher for Longer
Minutes from the January 27-28 meeting revealed Fed officials are divided on when to cut rates:
- Inflation could be more persistent than expected
- Rates will stay at 3.50%-3.75% at least through Q2
- Some members think higher rates may be necessary if inflation doesn't ease
For Bitcoin, high rates mean the opportunity cost of holding non-yielding assets remains elevated.
What You Should Do with Your Crypto
- Don't panic: 40-50% corrections are normal in Bitcoin cycles
- Don't invest money you need: only keep in crypto what you can afford to lose
- Key catalyst tomorrow: the Supreme Court tariff ruling could move markets significantly
- If you DCA: these dips are exactly when the strategy makes the most sense
- Watch the $60,000 level: if Bitcoin loses that support, another significant drop could follow
The crypto market isn't in freefall — it's in a correction phase driven by external factors. Stay calm and avoid emotional decisions.
This article is for informational and educational purposes only. It does not constitute personalized financial advice. Investment decisions are the sole responsibility of the reader.
