Due to recent events, Bitcoin flirts with all-time highs, once again. As previously reported, all Bitcoin needed was a price spike above the $7,300 mark to be in firm bull territory. Bitcoin has achieved that goal thanks to a number of different factors, but the most obvious is the turmoil brewing in the Middle East at the moment. The airstrike on the Iranian general, Soleimani, has pushed Bitcoin upwards of 5%, which is even higher than gold, crude oil, and other cryptocurrencies. Whether the price hike is here to stay remains dependent on impending events; there is, however, plenty of evidence that suggests both short- and long-term gains are to be expected.
Comparison with other popular assets
As can be seen in any conflict, assets not dependent on fiat currencies for their value such as resources, precious metals, and others, have become very popular throughout the Middle East since the airstrike carried out by the White House and President Trump. Iran, unsurprisingly, has become a hotseat for these types of assets due to the obvious threat to the value of the local currency.
Due to the increased demand on these types of assets, gold is now up 2% and oil is trading at 3% higher than it was before the airstrike. Likewise, Bitcoin is also up and will likely continue to climb over the next few days, weeks, and, perhaps, months.
Asset protection and evasion
The reason for these types of assets being supported in times of conflict should be clear. Bitcoin and others give traders the opportunity to protect their wealth, no matter what ails should transpire with the currencies driving the economies of the countries they do business in. In short, assets like gold, oil and cryptocurrency give traders a unique opportunity to shield themselves from both local and global financial turmoil. In fact, we have already seen several instances around the world where global instability has affected Bitcoin prices. From Hong Kong to Venezuela to now the Middle East (again), groups of all types, not just business professionals, utilize cryptocurrencies and blockchain technologies to protect themselves against government control and fund seizure. Such support, is what many believe will drive Bitcoin’s prices through the roof, should the situation in Iran and the Middle East continue to degrade.
Other factors driving Bitcoin prices up
As Bitcoin flirts with all-time highs, we have to consider factors other than investors trying to protect their money that may be driving prices up as well. One of those may be that Iran is pushing for large-scale adoption of Bitcoin to subvert control of the U.S. economy. Reportedly following in China’s footsteps, Iran may also soon have a state-run Bitcoin-based cryptocurrency of its own. Not only would that increase usage within the country, but within the entire region as well. A third, and possibly even more important factor that could be driving Bitcoin higher is that the current turmoil in the Middle East has sparked global interest in Bitcoin and, thanks to the already low prices, a global surge in Bitcoin purchases in expected.
Where does Bitcoin’s current situation leave us?
While there are never any guarantees, all signs point to a serious, and perhaps extended, bull run for Bitcoin. Many strongly believe that the current climate is enough to bring Bitcoin to all-time highs, but we are going to have to watch the coin’s movements over the next few days and weeks to be able to confirm.