- Bitcoin fell 6% amid Israel-Iran tensions, but ETF inflows helped stabilize the market.
- Despite cyberattacks and war risks, crypto’s muted response reflects its evolving behavior and risk profile.
Geopolitical shocks continue to test the resilience of digital assets, and this week was no exception. As tensions between Israel and Iran escalated, the crypto market responded with volatility.
Within a span of just 72 hours, Bitcoin [BTC] shed 6% of its value, wiping out over $200 billion in market capitalization and triggering a wave of fear across investor sentiment.
Yet, as the immediate threat of broader conflict subsided and ETF inflows held steady, markets quickly regained stability.
Bitcoin followed suit, settling into a now-familiar crypto pattern: a sharp risk-off reaction, followed by an equally swift rebound.
Sentiment shakes the market
The Israel-Iran conflict triggered a spike in social media chatter and a swift risk-off reaction in crypto markets.
According to Santiment data, mentions of “Israel,” “Iran,” and related geopolitical keywords surged between the 12th and the 15th of June, mirroring a 4–6% drop in Bitcoin’s price and a $200 billion decline in overall crypto market capitalization.
Source: Santiment
Social sentiment turned deeply bearish during this period.
Yet, like in past crises, including the 2022 Ukraine war, Bitcoin soon found footing; hovering around $104K; thanks to steady ETF inflows and a temporary de-escalation of military tensions.
But even as the war narrative dominated headlines, crypto didn’t behave the way it once did during major crises. As Ray Youssef, CEO of NoOnes and former CEO of Paxful, told AMBCrypto,
“Markets usually don’t like surprises — but lately, crypto doesn’t seem to react much.”
In fact, despite a major $49 million hack targeting Iran’s largest crypto exchange, Nobitex, allegedly carried out by the cyber group Predatory Sparrow—the market barely flinched.
“That kind of breach would usually set off alarm bells, especially when it’s linked to military cyber units.”
Yet Bitcoin remained largely unmoved, holding near $105,000 with daily volatility under 2.1% and no panic selling across the board.
ETFs to the rescue
Even as fears rattled the market, ETF inflows stepped up as a stabilizing force. The chart shows consistent green bars – particularly strong inflows on the 9th, 10th, and 16th of June.
Over this stretch, total net inflows hit $216.48M, with total net assets climbing to $128.18 billion.
Source: SoSoValue
This steady capital injection helped cushion Bitcoin’s dip and supported its rebound. As in previous macro shocks, institutional participation via ETFs once again acted as a key buffer, softening volatility and reaffirming Bitcoin’s growing maturity.
Still, Bitcoin’s behavior increasingly mirrors traditional tech stocks rather than a hedge asset. Youssef observed,
“Bitcoin no longer appears to function as a hedge. Instead, it behaves more like a high-beta tech stock, caught in the macro winds but not really steering its own ship.”
His observation reflects the current 0.68 correlation between BTC and the Nasdaq 100; a level that reinforces just how interlinked crypto and traditional risk assets have become.
Market calm, but not for long
Despite Bitcoin’s relative stability, volatility may not be off the table just yet.
The ongoing conflict still looms large, and Alphractal’s On-Chain Capflow Sentiment Index is edging toward a potential distribution phase – often a precursor to heightened selling pressure.
While ETF inflows and strong fundamentals have helped BTC hold its ground, the market remains sensitive to sudden geopolitical shifts.
Wider macro risks also persist. Youssef warned,
“Disregarding escalating geopolitical tensions won’t make them disappear…”
Source: Alphractal
With October 2025 flagged as a potential macro turning point, this period of calm may be temporary.
