Geo-politcal Risk Triggers Crypto Volatility

This week was a textbook case of crypto volatility, with price action largely dictated by the unfolding geopolitical tensions between Israel and Iran. Bitcoin dropped from $108K down to $103K, rebounded back to $108K, and then dropped again to $102K overnight, highlighting just how reactive markets remain to global uncertainty. The fear spilled over into broader risk assets, with many altcoins retracing sharply in response.

Looking ahead, all eyes are on tomorrow’s FOMC meeting, where there’s a 98% probability of no change to interest rates. The real focus, however, will be Jerome Powell’s post-meeting remarks. Any signal toward future rate cuts or a shift back toward quantitative easing could be the catalyst for the market’s next major move.

Weekly Price Update

Global M2 Money Supply vs Bitcoin

We’ve been tracking the Global M2 Money Supply vs Bitcoin with an 84-day lead for the past couple of months, and the relationship has held up impressively well. The model helped us catch the March flush and gave strong confluence that $75K was likely the bottom in April. Since then, price action has continued to mirror the M2 trend closely, reaffirming that liquidity expansion remains a core driver of crypto upside.

M2 Money Supply vs Bitcoin (84 Day Offset)

Recently, we’ve seen the highest correlation shift toward a 108-day offset, which suggests liquidity is still filtering through, just with a slightly longer lag, likely due to geopolitical tensions. With the new offset applied, BTC re-syncs neatly with the same structure, projecting a potential move toward $160K+ heading into Q4, provided M2 continues its upward trend. We’ll be watching both models moving forward.

M2 Money Supply vs Bitcoin (108 Day Offset)

War Tensions Trigger Volatility, But Market Structure Remains Strong

Tensions between Israel and Iran escalated significantly over the weekend, leading to a wave of risk-off sentiment and a sharp sell-off across markets. Bitcoin briefly dropped to $102,500, but this was seen as a buying opportunity by many, with the price rebounding to $108,000 just days later.

The sell-off was triggered by Israel’s strikes on Iran, which prompted immediate retaliation. The scenes were confronting and sparked widespread fear, as investors weighed the potential for further escalation in the region.

Markets were further shaken when Donald Trump posted on social media, saying Iran “should’ve taken the deal” and urging everyone to evacuate Tehran. The post caused an almost immediate reaction—Bitcoin dropped from $108K to $106K, and several altcoins saw 5%+ red candles within minutes. Adding to the tension, China issued an alert for its citizens to evacuate Israel, reinforcing market fears.

Despite the geopolitical uncertainty, the underlying strength of the crypto market remains intact. Fundamentals and macro conditions are still favourable, and these pullbacks appear to be headline-driven, not a reflection of deteriorating structure.

Short-term volatility may continue, but if geopolitical tensions ease or resolution is found, it could act as a catalyst for renewed upside across the crypto space.

Institutional Power Shift: BlackRock Doubles Down on Crypto

BlackRock just said it wants to be “the largest crypto asset manager in the world.” Five years ago, the firm was openly anti-crypto, now it’s doing a complete 180. With spot Bitcoin and Ethereum ETFs live, and tokenisation adoption quietly rolling out, BlackRock is laying the groundwork to scale aggressively.

If they follow through, the ripple effect could be massive. BlackRock’s move is likely to pull in other heavyweight asset managers and accelerate capital rotation into digital assets, compressing the adoption curve and increasing demand for both BTC and ETH.

The numbers are already backing this up: Bitcoin ETFs saw $1.77 billion in net inflows over the past few days, including, heavy buying right after the Israel–Iran escalation, evidence that institutions buying the dip. Ethereum ETFs added roughly $300 million in the same window, with $21.4 million flowing in on the first trading day after the war intensified.

Inside UpTrade Alpha, we flagged weeks ago that BlackRock likely has strong conviction that an ETH ETF with staking is coming, helping explain the recent surge in ETH inflows.

Regulatory Milestone: Genius Act Passes Senate

The GENIUS Act has officially passed the U.S. Senate with a 68–30 vote, marking a major step forward in crypto regulation and positioning the U.S. to take a leadership role in shaping the industry’s future. The bill introduces clear guidelines to protect consumers, regulate stablecoin issuers, and increase transparency, while reinforcing the U.S. dollar’s role in the digital economy.

Senator Bill Hagerty stated: “With this bill, the United States is one step closer to becoming the global leader in crypto.” He added that once enacted, it would allow Americans and businesses to settle payments “nearly instantaneously” rather than waiting days or weeks.

For context, stablecoins are digital assets designed to maintain a 1:1 value with a fiat currency like the U.S. dollar, used for payments, trading, and transferring value quickly.

Should payment stablecoins gain full recognition under a U.S. regulatory framework, it could open the floodgates for major corporations to launch their own tokens. According to reports, Apple, Google, X, and Airbnb are already exploring tokenisation and digital payments.

Weekly Narrative Performance

Markets were hammered this week as geopolitical tensions escalated, sparking fears of a broader global conflict and triggering a wave of risk-off sentiment across crypto. Every major sector closed in the red, with blood in the streets as capital fled speculative assets.

The steepest losses came from high-beta plays. Layer 2s (-14.8%), AI (-14.7%), and DePIN (-14.5%) led the declines, showing just how quickly sentiment can flip when global uncertainty rises.

Sectors that had already been weakening, Gaming (-14.1%), NFT Applications (-12.4%), accelerated their downtrends. Even Memecoins (-12.2%), which had been among the strongest narratives in recent weeks, suffered sharp corrections, showing no sector is immune in this environment.

Meanwhile, more fundamentally driven sectors like DeFi (-9.8%) also gave back ground, reflecting thin liquidity and no safety outside of the majors.

Ethereum fared slightly better, down -8.5%, but it was Bitcoin (-2.9%) that stood tall, continuing to attract institutional capital as a relative safe haven.

In the Media: UpTrade CEO Talks Crypto Regulation on 3AW Finance

Our CEO and Founder, Jeff Zylstra, recently joined Deborah Knight on 3AW’s Finance segment to discuss the growing interest in cryptocurrency, Australia’s evolving regulatory landscape, and what it all means for investors. With global frameworks taking shape, Jeff shared key insights on where the space is heading and how UpTrade is helping Australians navigate it.

Listen HERE

Thinking About Trading

Talk To A Broker

‍

‍

‍