- Bitcoin dips below $103,000 amid Israel-Iran airstrike, raising concerns over its safe-haven status.
- Peter Schiff questions Bitcoin’s ability to serve as a store of value during geopolitical crises.
- Supporters argue Bitcoin has consistently rebounded stronger than gold and stocks in past crises.
Bitcoin experienced major volatility on Friday as the airstrike by Israel on Iran caused turmoil around the world. This sudden increase in tension caused serious market moves that have caused severe corrections in the cryptocurrency market. Bitcoin, which was trading over $107,000 since June 9, dipped under $103,000 momentarily. At press time, the cryptocurrency trades at $105,701, recording a 0.16% decrease in the last day.
The decline in the value of Bitcoin has raised questions regarding its placement as a safe-haven asset. Gold proponent Peter Schiff was quick to point out the huge difference between Bitcoin and conventional holdings in a crisis. When oil prices jumped by 5% and S&P futures declined by 1.5%, Bitcoin tumbled by 2%, unable to show the strength that gold demonstrated with a slight 0.85% gain.
Bitcoin as Digital Gold
The statement by Schiff revived the discussion on Bitcoin as digital gold and whether it is capable of serving as a store of value during turbulent times. He noted that, in a geopolitical crisis, investors usually pour into gold, which makes the gold price go up. In the meantime, Bitcoin failed to hold its own value, which brought its viability as a safe-haven asset during times of global uncertainty into question.
This story, however, was soon dismissed by Bitcoin enthusiasts. Blockstream CEO Adam Back pointed to the solid history of Bitcoin during geopolitical crises in the past. He stated that Bitcoin is likely to drop in the short term, but it will recover with more power than traditional assets like gold and stocks. Back still thinks that the long-term prospects of BTC are not hampered by its volatility in the short term.
This is supported by the history of BTC performance. As an example, at the point of the US-Iran tensions in January of 2020, BTC increased by 20% over the next two months, compared to the 6% rise in gold and -7% drop in the S&P 500. Likewise, following the Russia-Ukraine war in 2022, BTC rose by 15% in contrast to gold, which earned 9%, which demonstrates that BTC may rebound faster than conventional assets.
Source: X
Nasdaq Listing Proposal
In March 2023, as the banking crisis transpired in the US, BTC jumped by 32% over the following two months, whereas gold gained 11% and equities mustered only a pathetic 4% gain. These numbers prove the strength of BTC and its capacity to bypass conventional markets during a crisis.
According to some industry players like Andrei Grachev, the cryptocurrency market would be better integrated with traditional finance. Grachev suggested that BTC should be listed on Nasdaq, as he was confident that this could open the door to institutional buyers as well as make the market more stable. The step can contribute to the enhancement of the long-term feasibility of BTC and its positioning as a safe asset.
Despite the recent dip in BTC value due to geopolitical tensions, which has caused concern, the BTC track record indicates that it could easily turn around and rise. BTC has proven to be strong and resilient during times of crisis, bouncing back every time and even performing better than traditional assets.
Related Reading: Coinbase Launches Bold CFTC-Regulated Perpetual Futures for U.S. Crypto Traders
