After President Donald Trump authorized a US Airstrike to eliminate a top Iranian military official, the price of BTC and oil began surging. Some have drawn a parallel between the sudden rise in BTC price and the growing Middle East crisis.
How the Crisis Affected Bitcoins Price
Shortly after the US airstrike, the price of oil and BTC shot up. This event helped Bitcoin stabilize the $7,000 support levels. Since then, the price of BTC has remained in the green. The same is true for the top ten coins, many of which are following king Bitcoin.
While a BTC surge would be an occasion for celebration in the crypto community, the events the last few hours have not been a cause for celebration in the crypto community. There has been an uneasy quiet on social, some have gone as far as denying there’s a correlation between the recent price surge and the ME crisis. Historically, Bitcoin price has actually followed major oil moves. The chart below is comparing Brent Oil to Bitcoin price action. It’s not a perfect correlation, but there’s definitely some correlation going on.
Other Assets Rising
Besides BTC, Gold has also been doing quite well; its price has shot up to a four-month high shortly after the news was announced. The same is true for oil, which has continued to climb steadily. Across the globe, there is a flight to safety to safe havens such as gold with stocks seeing a decline globally. Nevertheless, some doubted that the strike, and the political instability it unleashed, bore any responsibility for the surge.
Is BTC a Safe Haven?
Up to now, there has not been any evidence to suggest that BTC is considered a safe haven for geopolitical risk. However, the data from the last few hours shows that its correlation with other traditional safe havens is growing. As a result, its correlation to geopolitical issues is likely to continue growing.
Why is Bitcoins Price Climbing?
Some have speculated that after the American airstrike, Iranians may have started purchasing BTC to counter the risk of further sanctions that could further hurt the value of their currency. Some crypto traders have suggested that Iranians are buying BTC in large amounts to use as a safe haven in case of a crisis.
The events unfolding in the Middle East have been broadcast far and wind. This has no doubt reached crypto traders all over the world. As a result, they might have factored that in when purchasing BTC. The reason for this is that the Iranian market in itself is too small to make such a huge impact on the price of BTC, according to some experts. Additionally, some have speculated that it has nothing to do with the Middle East. They claim that some traders might have just been waiting for the price to drop below $7,000 and when it did, they started buying. Thus, it has nothing to do with the current crisis.
Why Iranians are Interested in BTC
At the start of 2019, the New York Times had a report, which claimed that Iran and other nations could attempt to use Bitcoin to circumvent US sanctions. This could be true seeing as Iran’s president recently said that US sanctions had cost the nation’s economy about $200 billion.
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