Bitcoin Just Fell Below $65,000. What Happens Next?

Inflation caused by the war with Iran is one of the major culprits.

Bitcoin (CRYPTO: BTC) spent most of the spring grinding sideways while investors waited for the next leg up. Ultimately, they got the opposite of what they wanted; the coin briefly slipped under $60,000 on June 5, its lowest reading since March 2024.

This downturn is a bit sudden, as the coin was above $80,000 just a month ago. So what unwound the rally, and where might the coin plausibly end up by the close of 2026?

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The proximate cause of Bitcoin declining is outflows from the spot Bitcoin exchange-traded fund (ETF) flows over the last few weeks. The ETFs saw $4.4 billion in outflows, flipping the net year-to-date flows negative.

The macro backdrop largely explains the hasty exits. April's Consumer Price Index (CPI) came in at 3.8% year over year, driven by a 17.9% spike in energy prices tied to the U.S.-Israel-Iran conflict that began in late February. The May print, released on June 10, made things worse, with headline inflation rising to 4.2%, a third straight monthly acceleration, and the hottest reading since April 2023, as energy costs jumped.

Now, the Federal Reserve is widely viewed as more likely to hike rates than to cut them in 2026, meaning that the returns for safer investments like bonds will look that much more appealing compared to risky assets like Bitcoin. And that could even happen more than once if the war with Iran continues to constrain the global flow of energy and fertilizer resources, as that would send prices for those commodities even higher.

Coming into 2025, the market had priced in multiple cuts. The market is now pricing in the opposite.