Analysts say it’s the best time to buy BTC as the US Fed is going to start printing billions of dollars to support the war, as it has in previous episodes.
Bitcoin has defied a wave of risk-off sentiments that has seen most stocks plunge as uncertainty over the Middle East conflict between Iran, the US and their allies surges.
At press time, BTC was changing hands at $69,300, rising sharply in the past three hours to bring its 24-hour gains to 3%. Trading volume has also recovered after the weekend dip to hit $49 billion.
The broader market has started the week on the green, with the overall market cap gaining 1.7% to hit $2.35 trillion, while trading volume shot up 12% to $108.8 billion.
The crypto rally came amid a risk-off approach by investors who fear that the Middle East tensions could escalate as Iran launched attacks on American allies in the region. The S&P 500 dropped 1.2% at the start of trading, while the Dow Jones Industrial Average plunged over 280 points.
Safe-haven assets were the big beneficiaries. Gold futures opened the market 2% higher, while gold prices also recorded a notable rise. Ricardo Evangelista, an analyst at ActivTraders, explained:
What we’re seeing is an increase in safe-haven assets, which is reflected in the gains in gold and also reflected in the losses of risk-related assets, such as stocks.
Bitcoin has been billed as a safe-haven asset that can hold its value when the traditional markets tumble, similar to gold. The debate over whether BTC beats gold as the best asset in periods of market turmoil has raged for years, with Binance’s Changpeng Zhao and economist Peter Schiff engaging in one of the most prominent ones last year, as CNF reported.
However, with the continued expansion of TradFi’s involvement in crypto, BTC has correlated more strongly with stocks than gold. This week, the top crypto has bucked this trend, recording notable gains as the stock market lost billions of dollars.
While global uncertainty and geopolitical tensions escalate, analysts say it may be the best time to buy Bitcoin. One of these is Arthur Hayes, the chief investment officer at crypto VC fund Maelstrom and the former CEO of BitMEX exchange.
Hayes says that the US has a pattern in the Middle East: start a war with an adversary in the region, and then use that to justify the Fed printing hundreds of billions of dollars. This inevitably leads to capital moving into assets like Bitcoin and gold.
He stated:
The time to back up the truck and buy Bitcoin and high-quality shitcoins like $HYPE is immediately after the Fed cuts rates and or prints money to support the government’s goals in Iran.
In December last year, Hayes predicted that BTC would surge to $200,000 within three months, again pointing to a rise in the Fed’s printing.
Others have drawn parallels between the ongoing conflict and previous US strikes against its adversaries. Analysts from QCP Group noted:
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