Bitcoin plunged 2.02% to $75,064.20 after Iran blocked the key shipping route, triggering a broad investor exodus from risk assets. The drop hit the entire crypto market despite Bitcoin fund assets reaching a record $100 billion.

Geopolitical instability in the Middle East has driven market participants to pull capital out of volatile instruments, weakening Bitcoin’s position as a safe‑haven asset. At the same time, market data recorded an inflow of $663.91 million into Bitcoin ETFs, while Ethereum‑based funds attracted $127.49 million, marking seven consecutive days of institutional demand. Institutional investors also allocated $13.74 million to XRP instruments and $13.04 million to Solana‑based products. This dynamic underscores strong long‑term institutional interest in digital assets despite temporary price swings amid the Middle East conflict.

Pressure was amplified by industry-specific problems, including legal uncertainty around DeFi protocols, noted in reports by The Block. According to CoinMarketCap statistics, stablecoin liquidity on centralized exchanges is shrinking, leaving the market vulnerable to forced liquidations. Bloomberg reports that high yields on risk‑free assets and persistent inflation further discourage crypto accumulation. Thin order books on trading venues contributed to higher volatility and accelerated price declines during periods of peak market anxiety.

Most altcoins weakened: Ethereum (ETH) lost 2.89%, sliding to $2,307.42; XRP fell 2.12% to $1.4198; Solana and Cardano sank 3.40% and 3.54% respectively. Meme token Dogecoin also fell, down 3.40% amid the Strait closure and the general risk‑off sentiment. The current situation is forcing traders to revise strategies and reduce exposure to digital assets until logistics through the Strait of Hormuz get back on track.