$BTC Bitcoin held above $62,000 on Thursday, last trading around $62,276, after experiencing a drop in the previous session as investors assessed the renewed US-Iran hostilities, which reduced appetite for risky assets. This followed a sharper drop on Wednesday: Bitcoin fell more than 3% to around $61,691 after Trump said the temporary ceasefire with Iran had ended.

This is not a new conflict, but a resurgence:

- The US launched airstrikes against Iranian targets after Iran fired on non-military vessels in the Strait of Hormuz, breaking the ceasefire that had allowed BTC to briefly rise.

- Bitcoin had risen above $65,500 after the US-Iran peace deal eased oil concerns, but the new attacks forced a reassessment of that calm. - The US reportedly struck more than 80 targets, including over 60 Iranian Revolutionary Guard boats, near the Strait of Hormuz with precision munitions.

Risk asset behavior, but decreasing intensity: Bitcoin now more closely follows Treasury bond yields than traditional hedges like crude oil or gold, and the oil shock and hawkish Fed pricing that used to cause a 5% BTC drop with a single Hormuz headline now only produces about a 1.2% move. This is a pattern that has been in place with each tension since February, each generating a smaller reaction than the last.

ETF flows: The clearest recent data point: US spot Bitcoin ETFs recorded a net inflow of $21.4 million on July 7, extending the inflow streak to three sessions following a $221.7 million inflow on July 2 that ended a 10-day outflow streak.

In summary: BTC experienced a sharp drop following the breakdown of the ceasefire, but each new phase of the conflict has less impact on the price than the previous one; this suggests that markets have become somewhat desensitized to news from Iran, while remaining sensitive to Fed/interest rate expectations.

DYOR 🔍

#TrumpDeclaresEndToUSIranCeasefire