Bitcoin Tumbles Amid Geopolitical Uncertainty and Fading Institutional Demand

Bitcoin's price has taken a hit due to ongoing geopolitical tensions and a weakening institutional demand. As of Friday, the cryptocurrency was trading at around $62,900, down over 3% from the start of the week.

The Strait of Hormuz crisis between the US and Iran is weighing heavily on investors' risk appetite, keeping Bitcoin's short-term outlook under pressure. US Treasury Secretary Scott Bessent announced plans to impose 'measures that have never been seen before' on Iran, while Iran vowed to keep the strait closed until its demands are met.

Institutional demand for Bitcoin has shown signs of caution this week, with net outflows from US-listed spot Bitcoin exchange-traded funds reaching $332.02 million through Thursday. This is a sign that investors are becoming more selective and waiting for a stronger catalyst before committing fresh capital.