Bitcoin traded above $63,000 on Tuesday,
paring some of its gains from the previous session, as investors weighed renewed geopolitical tensions in the Middle East amid improving demand for U.S.-listed spot Bitcoin ETFs.
The world's largest cryptocurrency was last trading 0.7% higher at $63,295.27 by 1:30 PM.
Bitcoin had risen as high as $64,600 in the previous 24 hours before paring some of its gains.
Traders weigh Middle East tensions and a tech selloff.
This reflects a deterioration in risk sentiment, as concerns over lofty valuations of AI-related companies weighed on tech stocks in Asia. South Korea's benchmark KOSPI fell sharply despite a stellar earnings forecast from Samsung Electronics (KS:005930), triggering a sharp selloff in chipmaker stocks, while U.S. stock futures also declined.
Cryptocurrencies, which increasingly trade in lockstep with tech stocks during periods of risk sentiment shifts, also came under pressure as investors scaled back their holdings in speculative assets.
Meanwhile, fresh tensions in the Middle East kept markets cautious. According to Axios on Tuesday, Iran's military fired at least two missiles at commercial vessels transiting the Strait of Hormuz on Monday evening, ending a week-long pause in attacks under the U.S.-Iran agreement.
Bitcoin ETFs saw net inflows after a series of outflows.
Nevertheless, institutional demand showed signs of improvement. US-listed spot Bitcoin ETFs recorded net inflows of $265.7 million on Monday, according to data compiled by SoSoValue, continuing gains following a $221.7 million inflow on July 2.
The inflows marked a sharp reversal after a week of steady outflows in late June, when investors pulled nearly $2.4 billion from spot Bitcoin funds over several sessions amid heightened macroeconomic uncertainty and profit-taking.
Market participants are also monitoring upcoming US economic data and signals from the Federal Reserve for clues regarding the interest rate outlook.