Amid preparations for the US Federal Reserve’s interest rate meeting and the escalation of the conflict between Israel and Iran, pressure is mounting on Bitcoin and other cryptocurrencies. Experts note that these factors may lead to further declines in the value of the leading digital currency.
This is reported by Finway
The Impact of Geopolitics and Monetary Policy on the Cryptocurrency Market
Valentin Fournier, a leading analyst at BRN, points out that the Fed’s lack of decisiveness regarding interest rate cuts, combined with the tense situation in the Middle East, creates additional pressure on Bitcoin. According to the expert, the uncertainty caused by such events has already led to an increase in capital outflows from spot exchange-traded funds focused on Bitcoin.
“The market will closely monitor the Fed’s ‘language’ regarding future rate cuts, which may determine whether the current downturn deepens or finds support. Given this uncertain backdrop and positioning slightly below previous highs, we are reducing risks. The further path is likely to be unstable, and any deterioration in the geopolitical landscape could provoke sharper downward movements,” said Fournier.
Market Expectations and Prospects for Bitcoin
The situation in the Middle East escalated on June 13, 2025, when Israel struck at Iran’s military leadership. This event caused a significant drop in the price of Bitcoin. The previous Fed meeting took place on May 7, 2025, during which the regulator kept the rate unchanged. According to forecasts from CME Group, the probability of maintaining the current rate during the upcoming meeting on June 18, 2025, is 99.9%.
Matt Mena, an analyst at ETF provider 21Shares, expects that capital rotation in the third quarter of this year is possible if the Fed does decide to cut rates, even if this does not happen in June. High activity from venture investors and a favorable macroeconomic environment could provide a foundation for the recovery of Bitcoin and other risk assets in the second half of the year.