The recent missile attack by Iran on Israel has instilled fear in global markets, including cryptocurrencies. Bitcoin price dropped to $60,000 as tensions rise in the Middle East between Iran and Israel, leading investors to seek safety in gold and crude oil, which are both climbing, thus sparking discussion about the status of the cryptocurrency as a safe-haven asset.
Following the escalation, Bitcoin dropped to $60,315 from $64,000 within a few hours before moving up to $61,800. A staggering 154,000 traders were liquidated as price dropped by $4000, resulting in a total loss of $521 million. The psychological support at $60,000 is currently at play, but any further negative sentiment from geopolitical events could push the price lower.
Historically, Bitcoin tends to face downward pressure during geopolitical crises, as investors shift to gold, which saw a 1.5% rise amid growing tensions. However, some analysts believe that despite the current downturn, Bitcoin could potentially recover once the immediate tensions ease.
BlackRock CEO Larry Fink still believes that Bitcoin is a hedge against inflation, while Markus Thielen from 10x Research said that Bitcoin is still evolving and can be a gold replacement in the future, depending on the regulation.
As conflict in the Middle East intensifies, people have sought refuge in gold and bonds, as they have been considered safe havens for ages, while bitcoin is a relatively new asset.
According to Goldprice.org, Gold was up by 1.4% on October 1 to $2,665 per ounce, which was close to the record high, while crude oil increased by 7% to $72 per barrel.
Li Xing, the Financial Markets Strategist Consultant to Exness, pointed out that the conflict has shifted investors to gold making it more attractive. However, bitcoin, considered a safe-haven instrument, declined by more than 3%.
Precious metals analyst Jesse Colombo told his X followers that Bitcoin and crypto fall during geopolitical fears, unlike precious metals. He said, “It’s yet another risk asset just like high-flying tech stocks.”
Blokland Smart Multi-Asset Fund manager Jeroen Blokland also recently opined that some investors are exiting Bitcoin to invest in gold, thus reviving the debate on whether Bitcoin is a safe-haven asset. Crypto analyst Jesse Colombo pointed out that it goes down during geopolitical concerns, unlike gold.
Also Read: Bitcoin Dips as BlackRock’s Withdrawal Policy Hits Markets
