Investing.com-- Bitcoin retreated on Wednesday, extending recent losses as the Israel-Iran war raged on and quashed risk appetite, with the progress of a key U.S. stablecoin bill sparking little joy.

Broader crypto markets also retreated amid few signs of deescalation in the conflict. Focus was also on whether the U.S. would directly intervene, following harsh rhetoric from President Donald Trump.

Bitcoin fell 1.2% to $104,140.0 by 09:45 ET (13:45 GMT). The crypto had fallen as low as $103,000 over the weekend, and remained under pressure.

Waning risk appetite, due to the Israel-Iran conflict, was the biggest point of pressure on crypto. The conflict stretched into a sixth day on Wednesday, with focus squarely on whether the U.S. will directly attack Iran.

Overnight reports showed the U.S. mobilizing more jets to the Middle East, while Trump was also seen mulling a direct strike against Tehran. Trump kept up his calls for a total surrender by Iran.

While crypto markets are not directly impacted by geopolitical ructions, their speculative nature leaves them vulnerable to shifts in sentiment. This trend has kept crypto markets on a steady downturn since Friday.

Anticipation of a Federal Reserve meeting also kept markets on edge, although bets on a dovish tilt from the central bank were bolstered by weak U.S. economic prints.

US Senate passes GENIUS Act to regulate stablecoins

The U.S. Senate on Tuesday voted in favor of the GENIUS Act, a bill aimed at establishing a regulatory framework for stablecoins and their issuers.

The act was approved in a 68-30 vote with bipartisan support, and will now head to the Republican-controlled House of Representatives before it can be signed into law by Trump.

The GENIUS Act’s approval marks a major milestone for U.S. crypto regulation, and comes in line with Trump’s promises to pass more friendly legislation.

But crypto markets took little support from the passage of the bill, given that it has few immediate changes for the market. The GENIUS Act sets out a regulatory framework for stablecoins, including what reserves stablecoin issuers should hold, as well as new public disclosure requirements.

Spanish lender BBVA urges clients to invest in Bitcoin, Ether

Spanish banking group BBVA (BME: BBVA ) is encouraging its wealthier clients to allocate a small portion of their portfolios to cryptocurrencies, reflecting a growing shift among traditional financial institutions toward digital assets.

Speaking at the DigiAssets conference in London, Philippe Meyer, head of digital and blockchain solutions at BBVA Switzerland, said the bank’s private banking arm has been advising clients to invest between 3% and 7% of their portfolios in crypto, depending on individual risk tolerance.

"With private customers, since September last year, we started advising on Bitcoin," Meyer said. "The riskier profile, we allow up to 7% of (portfolios in) crypto."

The current recommendations focus on Bitcoin and Ether, though BBVA intends to expand coverage to additional digital currencies later this year.

Meyer noted that client feedback has been positive so far, pushing back on the notion that crypto exposure is inherently excessive. "If you look at a balanced portfolio, if you introduce 3% you already boost the performance," he said. "At 3% you are not taking a huge risk."

Crypto price today: altcoins fall, Fed in focus

Broader crypto prices fell on Wednesday, tracking losses in Bitcoin as risk appetite remained fragile.

Traders also kept away from big bets before the Fed’s interest rate decision later in the day. While the central bank is widely expected to leave interest rates unchanged at 0.5% , markets are positioning for a dovish tilt, especially as recent retail sales and industrial production data highlighted cracks in the U.S. economy.

Focus will be squarely on Fed Chair Jerome Powell’s outlook on interest rates.

World no.2 crypto Ether dropped 3% to $2,485.80, while XRP lost 3.7% to 2.13.

Cardano and Solana lost 4.4% and 3.2%, respectively. Among meme tokens, Dogecoin shed 3.3%, while $TRUMP fell nearly 5%.

(Ambar Warrick contributed to this report.)