Bitcoin rebounded as a bout of acute geopolitical tension eased after earlier sparking steep drops in cryptocurrencies.

The digital asset at one point Friday sank more than six per cent to US$59,643 but later steadied to change hands at $64,640 as of 10:55 a.m. in New York. Tokens such as Ether, Solana and meme-crowd favorite Dogecoin also stabilized.

Embedded Image

Israel launched a retaliatory strike on Iran less than a week after Tehran’s rocket and drone barrage, sending tremors through global markets. A report that nuclear facilities in the Iranian city of Isfahan were safe helped to salve some angst. Traditional havens such as bonds, gold and the dollar trimmed gains, while stocks came off session lows.

The tit-for-tat Middle East conflict is overshadowing the Bitcoin halving expected later Friday, which will curb new supply of the token.

Halvings historically bolstered the price of the largest digital asset. This time around, Bitcoin hit a record in mid-March before the event, leading to questions about whether the putative impact is already baked in.

Embedded Image

Ongoing Israel-Iran violence could lead to a “general risk-off sentiment across crypto,” said Stefan von Haenisch, head of trading at OSL SG Pte. But it might take a “significant move lower” to undo all of the bullishness around the halving, he added.

JPMorgan Chase & Co. and Deutsche Bank AG strategists have said that the quadrennial halving is largely already priced in by investors. A batch of three-month-old spot-Bitcoin exchange-traded funds in the U.S. have posted five straight days of net outflows ahead of the event.