Tensions in the Middle East have triggered a flight to safety, with traders shifting from altcoins to stablecoins and Bitcoin amid U.S. military escalation and persistent inflation uncertainty.

  • Due to the escalating tensions in the Middle East, major cryptocurrencies such as XRP, ADA, and SOL have dropped by more than 1%, while DOGE remains stable but has fallen by over 10% this week.

  • As investors seek to avoid market volatility, the U.S. spot Bitcoin ETF has attracted significant inflows, with new purchases amounting to $389 million.

  • The Federal Reserve kept interest rates unchanged but emphasized that inflation risks remain, which has intensified market uncertainty and impacted stocks and cryptocurrencies.

  • Spot Bitcoin

    Data shows that U.S. exchange-traded funds (ETFs) continue to attract inflows, with over $389 million in new purchases on Wednesday. The spot ETH ETF has seen cumulative inflows of $19 million.

    Reports indicate that U.S. officials are considering direct strikes against Iran, while the Federal Reserve has stated that the inflation outlook will be more persistent, causing panic among investors and leading to turmoil in the stock market, major cryptocurrencies, and commodity markets.

Federal Reserve Chairman Jerome Powell warned on Wednesday that tariffs and global conflicts could make it harder to curb inflation. Although the Fed kept interest rates unchanged, Powell stated that tariff costs "will be passed on to the end consumer," and the Fed needs to "see more" before considering rate cuts.

Altcoins are considered high-risk investments and are typically the first to be sold off during periods of macro pressure.

Bitcoin continues to maintain range-bound fluctuations. Despite being buoyed by ETF inflows and a weak dollar, the largest cryptocurrency has risen 13% so far this year, but this week it has neither decisively acted as a safe haven nor as a risk asset.

FxPro analyst Alex Kuptsikevich stated: "Bitcoin seems caught between two worlds. It has neither reacted to the rising risk appetite nor surged like gold during heightened conflicts."