Daily Market Update: Stocks Hit Records But Bitcoin Can’t Catch a Break — Here’s Why

TLDR

• Bitcoin fell below $77,000 after fresh US military strikes on Iran dented peace deal hopes
• US spot Bitcoin ETFs recorded $105 million in net outflows on May 22, the sixth straight day of outflows
• Stock futures held flat, with the S&P 500 and Nasdaq hitting record highs in Tuesday’s session
• Most major altcoins fell alongside Bitcoin, including Ethereum, XRP, Solana, and Cardano
• Key inflation data — the PCE index — is due Thursday and could influence Fed rate decisions

Bitcoin dropped sharply on Tuesday after renewed US military action in Iran pushed investors toward caution. Stock futures held steady as markets weighed the same geopolitical uncertainty.

Bitcoin fell to $75,912, down nearly 2%, after trading close to $78,000 in the previous session. The drop came after the US military carried out what it called “defensive” strikes in southern Iran, sinking two vessels belonging to the Islamic Revolutionary Guard Corps that were trying to lay mines in the Strait of Hormuz.

Iran responded by firing missiles at US planes. The US then struck missile launchers near Bandar Abbas, according to the Wall Street Journal.

Peace Deal Hopes Fade

The strikes came just days after President Trump said a peace memorandum with Iran had been “largely negotiated.” That optimism quickly faded as the military exchanges continued.

Secretary of State Marco Rubio said any formal deal would likely take a few more days to finalize. The Strait of Hormuz remains mostly closed to commercial traffic, keeping oil markets on edge.

This pattern has defined the past month for crypto traders — swinging between optimism over a potential breakthrough and fear of further escalation.

ETF Outflows Add to Bitcoin Pressure

Beyond geopolitics, Bitcoin faced additional pressure from slowing institutional demand. US spot Bitcoin ETFs logged net outflows of $105.19 million on May 22. That marked the sixth consecutive day of outflows, with total redemptions over that stretch hitting roughly $1.55 billion — about 1.6% of total ETF assets.

Analyst Dessislava Ianeva of Nexo Dispatch noted that while investors are trimming crypto exposure, there are no signs of panic. Funding rates are steady and open interest has pulled back from recent highs.

Elevated Treasury yields and expectations of Federal Reserve rate hikes have also weighed on crypto broadly.

Most altcoins followed Bitcoin lower. Ethereum dropped 1.7% to $2,074. XRP also fell 1.7% to $1.33. Solana and Cardano each declined around 1.7% to 1.8%.

Stock Markets Hold Ground

US stock futures were largely flat in early Wednesday trading. Dow and S&P 500 futures were near unchanged, while Nasdaq 100 futures edged up 0.1%.

On Tuesday, both the S&P 500 and Nasdaq Composite closed at record highs, lifted by hopes around the Iran talks and confidence in chip stocks.

Earnings reports due Wednesday include Marvell Technology, Salesforce, Snowflake, and Abercrombie & Fitch.

All eyes now turn to Thursday’s PCE inflation data, the Fed’s preferred inflation measure. The reading is expected to shape market expectations for upcoming rate decisions.

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