Bitcoin falls to 5-week low amid war jitters, ETF outflows

Bitcoin fell to its lowest level in more than five weeks as jitters over the economic outlook and outflows from US exchange-traded funds weighed on the largest cryptocurrency.

Bitcoin dropped as much as 1.5% to $74,017 in Singapore Thursday, its weakest since April 20, while second-largest token Ether fell more than 2%.

Concerns that the ongoing US-Iran war will fuel inflation and trigger interest-rate increases are unnerving investors even as stocks have soared to record highs on optimism about artificial intelligence. US spot-Bitcoin ETFs have seen net outflows of about $1.5 billion so far in May.

Bitcoin’s weakness “looks mostly macro-driven, not crypto-specific,” said Sean McNulty, Asia-Pacific derivatives trading lead at FalconX. Higher US yields and a firmer dollar have tightened financial conditions, while ETF withdrawals and reports of a large block sale of the iShares Bitcoin Trust — the largest Bitcoin ETF — also dented sentiment, he said.

IG Markets analyst Tony Sycamore said crypto traders are taking a more cautious stance as they wait for concrete progress out of the Middle East.

“Furthermore, with equity markets starting to look a little tired, Bitcoin is feeling the pinch as leveraged long positions get trimmed on the break of key support levels in the mid $70,000’s,” Sycamore said, adding near-term risks are tilted toward the downside.