Increasing tensions in the Middle East have led to major changes in the markets. Following Iran’s attack on Israel, Bitcoin rapidly lost value and gold prices rose. These contradictory movements have once again brought into question whether Bitcoin is a safe haven or not. While investors are turning to gold in the face of current uncertainty, Bitcoin’s role is still unclear.
Bitcoin’s Fall Amid Market Uncertainty
Following the Iranian missile attack on October 1, Bitcoin lost more than $4,000 in value. Bitcoin fell from $64,000 to $60,315. BTC, which experienced a 3% drop in 24 hours, later rebounded to $61,800. This sudden decline created difficulties for short-term investors. A total of $521 million was liquidated and 154,770 investors suffered losses.
Bitcoin’s negative reaction to geopolitical crises has been seen before. Bitcoin experienced a similar decline following the Iranian drone attack in April. Although some investors still see Bitcoin as a protection against inflation, its decline in such situations weakens this perception.
The Rise of Gold as a Safe Haven
Gold, unlike Bitcoin (BTC), maintains its strong stance as a safe haven in times of crisis. Gold prices increased by 1.4% to $2,665 per ounce on October 1. This value is very close to gold’s historical peak. Investors turn to gold, which they see as a safe haven in times of increasing uncertainty. The rise of gold in this period is parallel to increasing geopolitical risks.
Financial strategist Li Xing stated that gold stands out as a safe haven in such periods. As uncertainty increases, investors turn to gold, supporting the increase in prices. Gold has been known as the most preferred investment tool against global uncertainties for many years.
Discussing whether Bitcoin is a Safe Haven
Bitcoin’s decline has raised questions about whether it is a safe haven or not. Jeroen Blokland, founder of Blokland Smart Multi-Asset Fund, stated that many investors sold Bitcoin and bought gold in uncertainty. This behavior has called into question Bitcoin’s potential as a safe haven. Analysts think Bitcoin needs to mature.
BlackRock CEO Larry Fink stated that Bitcoin could be an alternative to inflation. Bitcoin’s potential as an alternative to gold in the long term is still being discussed. However, for this transition to occur, its volatility must decrease. Experts say Bitcoin (BTC) could replace gold in the future. However, its price currently continues to be affected by economic cycles.
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