Bitcoin Slides to Nine-Month Low as Policy Shocks and Global Tensions Rattle Risk Markets
A wave of macroeconomic and geopolitical headlines sparked a sharp, broad-based selloff across global markets on Thursday, dragging Bitcoin down to a nine-month low and wiping billions from the crypto sector.
Bitcoin fell 7.4% in a 24-hour stretch, briefly touching $82,134 before stabilizing slightly in early Friday trading. The broader crypto market fared little better, with total market capitalization sliding 6.7% and liquidations swelling to roughly $1.68 billion.
Uncertainty out of Washington was a key catalyst. Markets reacted to signals that the White House is nearing a decision on the next Federal Reserve chair, a move widely interpreted as potentially ushering in a more inflation-focused and less accommodative monetary stance. Expectations of tighter financial conditions weighed heavily on risk assets, including cryptocurrencies.
Additional pressure came from a new executive order declaring a national emergency tied to trade policy. The measure lays the groundwork for tariffs on goods linked to countries supplying oil to Cuba, amplifying fears of escalating trade frictions. At the same time, concerns over possible U.S. involvement in Iran added to a broader risk-off mood across equities and digital assets.
Geopolitical stress points elsewhere also contributed. The ongoing conflict in Iran, rising tensions in the South China Sea, and the prolonged Russia-Ukraine war collectively dampened investor appetite for speculative assets.
Market data underscored the intensity of the move. Bitcoin’s open interest jumped sharply from Wednesday onward, while futures and spot volume indicators trended lower—signaling coordinated selling across both leveraged and spot markets.
Derivatives markets reflected growing downside caution. Options positioning suggested traders were bracing for further weakness in the near term, with elevated demand for downside protection and pricing that implied risk of a deeper pullback.
By early Friday, Bitcoin had clawed back some ground, rising about 1.1% to trade near $82,850. Equity markets also showed tentative signs of stabilization during the Asian session after near-term political uncertainty eased following progress on U.S. government funding. Still, sentiment remains fragile as investors weigh policy shifts against an increasingly complex global backdrop.