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Bitcoin drops to $86,000 as geopolitical risks rise
Bitcoin started the week with a decline, dropping as much as 3.5% on January 25 to a low of just above US$86,000 amid rising geopolitical tensions, before rebounding slightly to US$87,733 in early Asian trading on January 26.
Ether also fell by up to 5.7% before recovering 2% to trade at US$2,872, near its mid-December lows.
Analysts from FalconX noted that the rebound on January 26 appears to be a pause rather than a sustained recovery, with limited trading flows observed.
US spot Bitcoin ETF outflows reached US$1.7 billion last week, erasing previous inflows.
Market concerns include potential US tariffs on Canada, reports of US naval movements toward Iran, and fears of a US government shutdown.
Additionally, traders are watching for possible Japanese intervention following the yen’s decline and are monitoring China’s military developments.
🔗 Source: Bloomberg
🧠 Food for thought
Implications, context, and why it matters.
Bitcoin ETF outflows need context against longer-term net inflows
- Five straight days of US outflows totaling $1.7 billion last week were cited; that figure should be weighed against cumulative net inflows for US spot Bitcoin exchange-traded funds (ETFs), which have stood at $56.65 billion since the products came onto the market in 2024 1.
- This context can be used to judge whether the pullback was driven by short-term risk-off sentiment tied to geopolitical tensions or by a deeper shift in institutional demand.
- Flows by issuer were also worth tracking. On at least one large outflow day in SoSoValue data, exits were spread across BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), and Grayscale Bitcoin Trust (GBTC), rather than being concentrated in one fund 1.
Fintechs can position gold access as investors rotate into safe havens
- Fintech apps, crypto exchanges, and robo-advisors can keep more customer money by making gold exposure easier to buy when some users move out of crypto.
- Gold trading above $5,000 an ounce fits with strong gold-ETF demand in 2025. Global investors put $89 billion into physically backed gold ETFs, according to the World Gold Council 2.
- Platforms can add tokenized gold (digital tokens designed to track the price of gold) or traditional ETFs to meet demand for safety and reduce the chance users shift funds to rivals during volatile markets.
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