Bitcoin Drops 2.23% Amid Israel Iran Airstrikes

Bitcoin faced significant volatility following Israel’s airstrikes on Iran, which triggered widespread market unrest. The cryptocurrency, which had been trading above $107,000 since June 9, briefly fell under $103,000. At the time of reporting, Bitcoin was trading at $104,815, reflecting a 2.23% decrease over the last 24 hours.

This market performance during geopolitical tensions has sparked debate about Bitcoin’s role as a safe-haven asset. Peter Schiff, a prominent gold supporter, highlighted the differences between Bitcoin and traditional safe-haven assets during crises. Amidst a 5% rise in oil prices and a 1.5% fall in S&P futures, Bitcoin fell by 2%. Schiff pointed out that investors rushed to gold, causing its price to increase by 0.85%, while Bitcoin lacked resilience, raising questions about its suitability as a store of value during turbulent periods.

Bitcoin enthusiasts, however, quickly countered this narrative. Blockstream CEO Adam Back argued that historical data shows Bitcoin often rebounds stronger after geopolitical events. For instance, during the escalation of US-Iran tensions in January 2020, Bitcoin increased by 20% over the following two months, outperforming gold, which rose by 6%, and the S&P 500, which fell by 7%. Similarly, following the onset of the Russia-Ukraine war in 2022, Bitcoin returned 15% over 60 days, compared to gold’s 9% return. During the US banking crisis in March 2023, Bitcoin rose by 32% over the next two months, while gold increased by 11% and equities by only 4%.

The performance of Bitcoin through such events demonstrates its potential to rebound and surpass conventional markets. For example, during the COVID-19 outbreak, Bitcoin declined by 25% but then increased by 21% over the next two months. The most notable example was during the 2020 US election, where Bitcoin surged by 131% in 60 days. Some industry participants, such as Andrei Grachev, suggest that cryptocurrency would benefit from greater integration with traditional finance. Grachev proposed a Nasdaq listing as a way of gaining the interest of conventional investors, which could provide the crypto market with greater stability and longer-term institutional backing.

Despite the recent fall of Bitcoin following geopolitical tensions, the asset’s track record during previous crises suggests that it could still rally and surpass conventional assets. This resilience highlights Bitcoin’s potential as a safe-haven asset, although its performance during the latest geopolitical event has raised concerns about its reliability in times of crisis.