In a surprising turn of events, President Donald Trump announced the cancellation of planned military strikes against Iran and hinted that a peace deal is imminent. This development sparked a notable uptick in Bitcoin’s value, which rose by 3%, climbing from $61,100 to over $63,400 on June 11. The announcement also had a ripple effect across the broader stock market, with the S&P 500 rising by 1.75%, the Nasdaq surging by 2.5%, and the Dow Jones Industrial Average soaring by more than 900 points.
Despite this bullish move in Bitcoin, institutional investors still face obstacles. Bitcoin exchange-traded funds (ETFs) have experienced significant outflows, totaling $4.4 billion over the past 13 sessions—the worst streak since the products were launched in 2024. These outflows have been fueled by rising geopolitical tensions associated with the US-Iran standoff, which prompted many investors to seek safer asset classes. Additionally, uncertainty ahead of the Federal Reserve’s upcoming June meeting has contributed to a dampened risk appetite among institutional investors. Fidelity’s Bitcoin ETF, FBTC, was reported to be among the funds suffering the most significant selling pressure.
Throughout the past month, Bitcoin ETFs have seen predominantly negative flows. Analysts suggest that the recent selloff appears to be more cyclical than structural, as the digital asset has often rebounded swiftly following diplomatic signals. This commentary aligns with a broader trend observed in the ETF market, indicating a cooling risk appetite earlier this year.
The cancellation of military strikes and Trump’s indication of substantial agreement on a draft peace deal with Iran alleviates several concerns that have pressured Bitcoin holdings. Investors had been wary of potential regional escalations and supply disruptions affecting oil transport through the Strait of Hormuz, leading to a rotation into safer investments like gold and bonds. Following Trump’s announcement, Brent crude oil prices fell approximately 3% to around $90 per barrel, reflecting eased supply risks.
Interestingly, Bitcoin’s price movements during this tumultuous period have not entirely aligned with its narrative as a safe haven asset. As tensions escalated with Iran, Bitcoin’s value dropped alongside equities rather than holding firm with gold. Conversely, Bitcoin’s rally after the peace deal announcement mirrored the performance of major stock indices, indicating risk-on behavior rather than traditional safe haven dynamics. This provides a plausible rationale for the potential return of institutional capital, suggesting that as the risk landscape stabilizes, investments in Bitcoin could increase.
The reaction to the news extended beyond Bitcoin, with altcoins showing even sharper gains. Ethereum (ETH) rose by 4%, Solana experienced a surge of 6.8%, and Cardano climbed by 6.6%, illustrating a broader market enthusiasm in response to the geopolitical developments.
