Bitcoin dives, rebounds, then tanks again as ETF flows collapse

Markets went straight into meltdown mode Sunday night after the United States bombed Iran in a direct military strike and Iran retaliated by shutting down Strait of Hormuz, the most important oil route on the planet.

That has triggered violent selloffs across every major market, from stocks to Bitcoin, from oil to the dollar and the euro. The world’s financial system is now reacting like it just got sucker punched. Its unlike anything we have ever seen.

Oil was first to go wild. In the first trading session after the futures market opened, US crude rose $1.76, or 2.38%, to $75.60 per barrel. Brent crude climbed $1.80, or 2.34%, landing at $78.81. Brent even briefly touched $81, which was a 5.7% spike, before it slipped back.

By press time, the price gains were gone. Oil was down 0.5%, which made no sense to anyone watching. Traders are now locked on Tehran, waiting to see what it does next. Hossein Amir-Abdollahian, Iran’s foreign minister, said Sunday that Iran reserves “all options” to defend its sovereignty. S&P Global Platts noted the price surge could reverse entirely if Iran chooses not to respond.

Bitcoin dives, rebounds, then tanks again as ETF flows collapse

The crypto market didn’t waste a second. Bitcoin had dropped to $98,000 on Sunday. That was its lowest point in over a month. Less than an hour later, it swung back above $102,000, before slipping again. At the time of writing, it sat at $100,879. The market was a disaster. More than $1 billion in crypto positions were liquidated in just 24 hours, and over 95% were long bets.

Things got uglier when inflows into spot Bitcoin ETFs dried up. Between Monday and Wednesday, $1.04 billion had gone in, based on CoinGlass data. But by Thursday, that number was flat. On Friday, just $6.4 million came in. That was the same day President Donald Trump left the G7 early and announced a two-week review of US options on Iran.

The assumption that Bitcoin would act like a safe haven collapsed. It started trading like a risky tech stock instead. Kaiko, a crypto data provider, said Bitcoin’s correlation with the Nasdaq had surged quite fast in recent weeks.

Stock indexes bleed across Asia, Europe, and US futures

Futures tied to US stocks also started dropping. The Dow Jones Industrial Average fell 109 points, or 0.3%. S&P 500 futures lost 0.3%, while Nasdaq 100 futures were down 0.4%.

Asian markets opened deep in the red too. In Japan, the Nikkei 225 dropped 0.56%, and the Topix fell 0.49%. The worst-hit companies were all in tech: Screen Holdings crashed 4.78%, Lasertec Corp sank 4.31%, and Disco Corp went down 3.38%. Big names like Advantest and Softbank didn’t escape either, falling 1.66% and 0.76%.

It was the same story in South Korea. The Kospi index lost 1.05%. The Kosdaq, which includes smaller-cap companies, got hit even harder, down 1.78%. The country’s top automakers took the brunt. Hyundai Motor shares dropped 4.05%, and Kia Corp fell 4.15%.

Australia’s S&P/ASX 200 also took a dive, down 0.76%. In Hong Kong, futures for the Hang Seng Index pointed to more losses. They stood at 23,396, well below the index’s last close of 23,530.48, suggesting more downside ahead.

Japanese carmakers had no luck either. As of press time, Nissan Motor dropped 2.22%, and Mazda Motor was down 2.17%. Mitsubishi Motors lost 1.87%, Honda Motor slid 1.55%, and Toyota dropped 1.36%.

Over in Europe, markets weren’t much better. The IBEX 35 rose 0.77%, closing at 13,850.3, and Germany’s DAX jumped 1.27% to 23,350.55. But the FTSE in London dropped 0.2% to 8,774.65, and France’s CAC 40 was completely flat at 7,589.66. The STOXX600, a broader European index, barely moved, up just 0.13% to 536.53. And the euro was trading at $1.15 against the dollar after going as high as $1.8 just an hour ago.