Bitcoin and Asian stock markets fell on Friday following new U.S. airstrikes on Iran, which heightened geopolitical uncertainty. In addition, President Donald Trump’s allegations of Chinese interference in the 2020 election negatively impacted risk sentiment, leading to a decline in the Australian dollar.
BTC, the leading cryptocurrency by market capitalization, fell below the $63,000 mark, continuing its decline from Thursday’s $65,000 level by nearly 1.4%, according to CoinDesk data. At the time of writing, the cryptocurrency was trading just below its 50-day simple moving average, a widely used indicator of short-term momentum.
Asian stock markets fell: Japan’s Nikkei index dropped nearly 3% and hit its lowest level in the past month. Australia’s ASX 200 fell 0.5%, while Nasdaq futures dropped 0.8%. The Wall Street tech index fell more than 1.6% on Thursday.
Iran’s semi-official Fars News Agency quoted the Hormozgan provincial governor’s office as reporting that U.S. Air Force strikes had hit five bridges in the southern province of Hormozgan. A missile strike also hit the Chabahar maritime control tower in Iran. Surprisingly, WTI crude oil futures remained stable at around $79 per barrel, ignoring the geopolitical tensions caused by the new wave of U.S. attacks on Iran.
Trump and China
Meanwhile, the Australian dollar—a currency sensitive to commodity market fluctuations and a key G7 representative in relations with China—fell against the U.S. dollar amid fears of renewed tensions between the U.S. and China.
Late Thursday evening, Trump announced the declassification of intelligence reports alleging Chinese interference in the U.S. election. He stated that Beijing had gained access to 220 million U.S. voter records, calling this a serious threat to democracy. The Chinese Embassy categorically denied these allegations.
This dispute alone does not have a significant impact on the market, but its potential to worsen U.S.-China relations ahead of Trump’s September meeting with Xi is likely the reason for AUD traders’ heightened caution.
“Trump’s decision to level new, sweeping accusations against Beijing just weeks before this meeting introduces a new source of friction into a relationship that had previously stabilized,” said Eamon Sheridan, chief currency analyst for the Asia-Pacific region at InvestingLive, in a market update.
“The rhetoric itself could complicate the diplomatic path leading up to September, regardless of the actual circumstances,” — Sheridan added.
The decline in the AUD may serve as a warning that any escalation of tensions between the U.S. and China could heighten uncertainty and spill over into other risky assets, including BTC.
