Bitcoin's Safe Harbor Status 'Beta Tested'
In just a week, marked by the growing political tension in the Middle East, bitcoin (BTC) has twice followed traditionally safe haven assets such as gold.
Last week, the rise of BTC coincided with news that Iranian general Qasem Soleimani was killed by a US drone attack. He was not convinced that the price had increased due to the narrative “the existence of a safe haven shelter” spread by many bitcoin enthusiasts at the time. Meanwhile, Yesterday BTC once again moved with gold after US President Donald Trump expressed his desire to worsen the situation in the Middle East. Following the news, while gold and bitcoin fell, US futures and stocks rose.
Su Zhu, CEO Three Arrows Capital, reacted explaining that "BTC and those with gold / macro correlations [with] belief BTC was rewarded in the last few days by the fading movement in the beginning," BTC initially proceeded in the opposite direction of a knee jerk, and then in the same direction progressed.
As popular Bitcoin analyst Willy Woo points out, recent events can be considered a "beta test" for bitcoin as a safe haven asset. According to Woo, the test was "successful".
Underlining the point, Woo shared a chart by crypto analytics company Messari that shows how the digital asset increased after Iran's retaliation attack. This increase came at the end of 5-day long events that ended with Trump's speech on Wednesday.During this period, Bitcoin added more than 20% to its price.
Meanwhile, as noted in Coin Metrics's last report on Tuesday, "the wider cryptoasset reaction function to bitcoin and macroeconomic and geopolitical events is still not understood, referring to the fact that bitcoin reacted to the original US airstrike a few hours later." traditional financial assets moved. However, as "there was more potential correlation after the first incident" that occurred after the report was published, Coin Metrics will investigate this issue in more detail in its reports to be released next Tuesday.