Bitcoin fell 0.9% to $64,139.0 by 02:10 ET (06:10 GMT) on Monday, extending a period of muted price action after a quiet weekend. The token stayed within a trading band that has dominated most of this year, as demand for crypto assets remained weak. Bitcoin was also trading about 50% below an October record high and continued to nurse substantial losses for the year.<\/p>\n
Risk appetite was dampened by escalating tensions between the United States and Iran after both sides carried out further strikes over the weekend. The U.S. was seen broadening the scope of its attacks on Iran following the death of at least three service members, while Tehran responded by maintaining attacks on surrounding Gulf countries and American bases in the region.<\/p>\n
Oil prices rose sharply as the heightened aggression disrupted shipping in the Strait of Hormuz. The uptick in crude prices added to concerns over energy-driven inflation, raising the prospect that the Federal Reserve could consider additional interest rate increases later this year. While the central bank is widely expected to keep rates unchanged at its July meeting, markets remained alert for hawkish signals from policymakers, especially after several Fed members recently warned that rates might need to rise further to address sticky inflation. Elevated rates are generally seen as negative for non-yielding assets such as Bitcoin and other cryptocurrencies.<\/p>\n
Separately, discussion over a proposed Bitcoin blockchain software change, BIP-110, added another focal point for the market. MicroStrategy Inc Chair and prominent Bitcoin advocate Michael Saylor on Sunday cautioned against the upgrade, which is designed to temporarily limit the amount of non-monetary data\u2014such as Ordinals\u2014stored on the blockchain and to refocus on Bitcoin\u2019s monetary role.<\/p>\n
In a social media post, Saylor argued that a soft fork like BIP-110, which could render some blocks invalid, should be reserved for addressing severe failures, and said the proposal does not fix any known critical bugs. Supporters of BIP-110 contend that the change would remove spam from the blockchain and reduce unnecessary burdens on node operators.<\/p>\n
Broader cryptocurrency prices declined on Monday after a subdued weekend. Ether, the world\u2019s second-largest crypto by market capitalization, fell 0.7% to $1,857.05. XRP also dropped 0.7%, Solana slipped 0.2%, and Cardano declined 2.4%. BNB was down 0.7%.<\/p>\n
Memecoins were also weaker, with Dogecoin falling 1% and $TRUMP dropping 4.1%. Overall, crypto markets have largely underperformed this year in line with Bitcoin\u2019s weakness.<\/p>\n
Why did Bitcoin fall on Monday?<\/strong> What is BIP-110 and why is it controversial?<\/strong> How did major altcoins perform?<\/strong>
Bitcoin declined 0.9% to $64,139.0 as markets reacted to escalating U.S.-Iran tensions, higher oil prices, and concerns that persistent inflation could lead to further U.S. interest rate hikes, all of which weighed on demand for risk assets, including cryptocurrencies.<\/p>\n
BIP-110 is a proposed Bitcoin blockchain upgrade aimed at temporarily restricting large amounts of non-monetary data, including Ordinals, to prioritize Bitcoin\u2019s monetary function. Michael Saylor warned against the soft fork, arguing such changes should be reserved for severe failures and that BIP-110 does not address any known critical bugs, while proponents say it would reduce spam and node burdens.<\/p>\n
Major altcoins moved lower alongside Bitcoin: Ether fell 0.7% to $1,857.05, XRP dropped 0.7%, Solana slipped 0.2%, Cardano lost 2.4%, and BNB declined 0.7%. Memecoins Dogecoin and $TRUMP fell 1% and 4.1%, respectively.<\/p>\n