Bitcoin rose to a two-week high on Tuesday as institutional interest resumed — inflows into spot Bitcoin ETFs pushed the market higher. However, escalating tensions between the US and Iran capped upside, and the broader crypto market remains deeply negative year-to-date.

Bitcoin climbed by 2.6% and reached $65,755, a two-week peak. Analysts say the partial restoration of institutional demand was the key driver: spot Bitcoin ETFs have recorded inflows for a second consecutive week, signaling large-investor interest in buying the dip.

Aggregator SoSoValue reports inflows of $75.7m and $197.4m in the two most recent weeks, respectively. Volatility in AI-related equities also fed flows into crypto: declines in leading chipmakers pushed some capital back into digital assets in search of opportunities.

The external headwind restraining a stronger rally is the renewed US–Iran escalation. On Monday, the two sides exchanged strikes for the tenth consecutive day, with Washington expanding its attacks after three US service members were killed over the weekend.

Tehran continues to hold the Strait of Hormuz effectively closed, while the US maintains a naval blockade and continues air strikes.

There were some tentative signs of de-escalation during the week: regional mediators reportedly delivered a new peace proposal to Iran, and both Iranian and US officials expressed cautious hope for a return to talks.

Still, the conflict's character remains tense, and Iran-backed Houthi forces in Yemen threaten a new front by imposing a naval blockade on Saudi Arabia.

Oil prices eased on Tuesday from five-week highs, which moderated fears of an inflation re-acceleration driven by energy prices and supported a cautious rebound in risk assets.

The wider crypto market followed Bitcoin higher: Ether gained 4.6% to $1,934.71, XRP added 4.6%, Solana rose by 3.9%, Cardano jumped by 9.2%, and BNB was up 2.1%. Meme tokens Dogecoin and $TRUMP each rose by about 2.5%. Nevertheless, cumulative market losses over recent weeks remain substantial, and near-term dynamics will hinge on geopolitical developments and continued ETF flows.