In 2020, Bitcoin has started off to a great start. Over the past week, the asset has gained over 5% of its value. The price of cryptocurrencies depends on demand and supply, however, in times of geopolitical crises, Bitcoin’s price skyrockets. During the Global Financial Crisis of 2009, Bitcoin was created, and ever since it has gained value in every political and nonpolitical crisis. During the U.S. China Trade war, Bitcoin’s price rallied. The situation may repeat itself and Bitcoin may go “off the dial” in the event of a war between the United States and Iran, amid rising tension between the two.
Tension has been rising between the two for over a week now and Bitcoin is steadily gaining value. It is currently trading at $8,116. The price crossed the $8.3K level on January 8, 2020. While several factors can be attributed to the price hike, the most important of them all is the conflict between the United States and Iran.
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The U.S. has been increasing pressure on Iran and this has been driving out investment from traditional finance and instruments and investing it in gold and “digital gold” Bitcoin. Iranians are preparing for the impossible situation of migration that they may face in case of a war. Money is being poured into Bitcoin from Iran, the U.S., and every other country that is suffering collateral damage. Iranians looking to protect their wealth and cut down their losses are turning to cryptocurrencies for hedging against the crisis.
But Iran isn’t the only place that has been in economic crisis. Venezuelans have been pursuing cryptocurrencies as a way of a means to survive though the news cycles have largely ignored their plight.
End of Crypto Winter?
Crypto winter that extended through 2018, now seems kind of far away. In fact, we may have hit the bottom in 2018 and there is massive rebounding that has carried into 2020. The possibility of a war or extended conflict with the Middle East could affect the price of Bitcoin and other cryptocurrencies.
As crypto’s value seems to increase in times of geopolitical struggles and a nervous futures and stock market, the USD may suffer a loss of value; almost a counter-weight to cryptocurrency trends. Coupled with an increase in value and the fact that many cryptocurrency exchanges and projects are now offering cryptocurrency debit cards and mobile wallets. Users can now easily use cryptocurrencies to make transactions. Now Bitcoin is mainstream and there is a bleak possibility of dropping below crucial support.
Bitcoin is more indestructible now than ever. Crypto experts are speculating when Bitcoin will surpass its December 2017 high. Day traders and HODLers are waiting for the right time to invest more or sell. Paying attention to the news and staying on top of world events gives us an edge in those crypto predictions.
Speaking of which… Some experts have predicted that the price of Bitcoin may go up to $100,000 as demand continues to rise. Cryptocurrency prices benefit from the current economic and financial systems. Tensions has been soaring between Iran and the U.S. after the Embassy attacks and death of Iranian Gen. Soleimani. Is military confrontation finished or will economic sanctions help bring peace between the U.S. and Iran?
The impact on Bitcoin prices may be found within the answer to those questions. We wait to see.
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