Bitcoin fell more than five percent on Tuesday, sliding below $63,000 as investors pulled back from riskier assets amid escalating tariff tensions and rising geopolitical uncertainty.
The world’s largest cryptocurrency dropped as low as US$62,964.64 in early trading, extending a months-long retreat that has seen prices tumble sharply from record highs reached late last year.
Market analysts said the latest decline reflected a broader shift in investor sentiment rather than a crypto-specific shock.
“The move lower in bitcoin looks less like a crypto-specific shock and more like a classic risk-sentiment reset,” said Christopher Hamilton, head of client investment solutions for Asia-Pacific ex-Japan at Invesco.
He described the sell-off as “tactical de-risking” rather than a wholesale structural exit from digital assets, suggesting investors were trimming exposure in response to heightened uncertainty across global markets.
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Bitcoin has shed about 27 percent since the start of the year and is down roughly 50 percent from its October peak above US$125,000. The slide has mirrored weakness in other high-risk assets, as traders reassess global liquidity conditions and geopolitical threats.
Tensions in the Middle East have added to market unease. Last week, US President Donald Trump said he would decide “over the next probably 10 days” whether to launch a strike on Iran amid Tehran’s resistance to a proposed nuclear agreement.
Since then, Washington has continued deploying military assets across the region, fuelling fears of a broader confrontation that could disrupt energy markets and global trade.
At the same time, investors are grappling with renewed tariff tensions that could tighten financial conditions and dampen economic growth prospects.
“The bigger point is that Bitcoin remains highly sensitive to global liquidity conditions,” said Billy Leung, investment strategist at Global X Australia. “If markets interpret trade policy as tightening financial conditions, crypto will feel that first.”
Digital currencies are often seen as speculative assets that benefit from abundant liquidity and low interest rates. When borrowing costs rise or risk appetite fades, they can experience sharp and rapid price swings.
Other cryptocurrencies also declined on Tuesday. Ethereum, the second-largest token by market value, fell more than one percent to around US$1,831.52.
Traditional safe-haven assets were also under pressure. Spot gold slipped about one percent to $5,171.87 per ounce, though it remains near historically elevated levels after months of strong gains.
The recent downturn marks a dramatic reversal from the rally that propelled bitcoin to fresh highs in October, driven by optimism over institutional adoption and supportive policy expectations.
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Since then, however, concerns over regulatory scrutiny, shifting monetary policy expectations and geopolitical flashpoints have weighed on sentiment.
Despite the pullback, some analysts argue that bitcoin’s long-term trajectory will depend largely on macroeconomic conditions and investor confidence in alternative stores of value.
For now, traders appear focused on near-term risks, with volatility expected to persist as markets digest geopolitical developments and policy signals from major economies.
Bitcoin was last trading just above US$63,000, down more than five percent on the day.
Bitcoin was created in 2009 by an anonymous figure known as Satoshi Nakamoto and is the world’s largest and most widely traded digital asset. It operates on a decentralised blockchain network and is often described as a hedge against inflation or a store of value, though its price movements have been highly volatile.
Over the past decade, bitcoin has evolved from a niche technology experiment into a mainstream financial asset held by retail investors, hedge funds and some institutional players. The launch of spot bitcoin exchange-traded funds (ETFs) in major markets in recent years broadened access and helped fuel significant price rallies.
Bitcoin’s price is heavily influenced by global liquidity conditions, interest rate expectations and investor risk appetite. During periods of low interest rates and abundant liquidity such as after the COVID-19 pandemic cryptocurrencies tended to surge as investors sought higher returns.
Conversely, tighter monetary policy, rising bond yields and geopolitical tensions have often triggered sharp sell-offs. Analysts frequently describe bitcoin as a “risk-on” asset, meaning it tends to move in line with equities and other speculative investments rather than traditional safe havens.
The cryptocurrency reached an all-time high above US$125,000 in October last year amid optimism about institutional adoption and supportive regulatory developments. However, it has since lost around half its value, reflecting profit-taking, macroeconomic uncertainty and shifting market sentiment.
Ethereum, the second-largest cryptocurrency, has followed a similar trajectory. While both assets have attracted long-term believers who argue that blockchain technology will reshape finance, their prices remain sensitive to global economic shocks, policy signals and geopolitical risks.
