Is the temporary negative reaction of Bitcoin following the Iranian bombing of Israel a sign that it would not be a safe haven?
Bitcoin, the canary in the mine
That is Andrew Ross Sorkin's question. The CNBC journalist was quick to draw the line, he who was gently mocked a few weeks ago for having said that the volatility of Bitcoin prevented it from being a store of value.
The problem with this question is that it assumes there would be a war. There is no war, only well-telegraphed and orchestrated conflict. But let's admit…
The CEO of the Strike application Jack Mallers replied that in such moments, “markets sell what they can, by default.”
“For example, it’s impossible to sell commercial real estate with one click on a Sunday. Bitcoin is one of the only free and liquid markets in existence. The reaction is immediate. It behaved similarly in March 2020 (Covid), when it fell to $3,000 and finally pranced to $70,000 a year later. I expect this scenario to happen again. »
In other words, Bitcoin is all that is left to express anxiety after the markets close. Moreover, it is very often on weekends that tragic events occur, when public opinion has its head elsewhere…
The miner and CEO of Barefoot Mining Bob Burnett offers a similar explanation:
“Bitcoin is both a risk and risk-free asset. In the short term, it serves as a canary in the coal mine in the face of world events. This is why it is seen as an asset vulnerable to periods of uncertainty. But history shows that this phenomenon is generally short-lived. Bitcoin ends up rising due to its nature as a long-term store of value. »
How could Bitcoin not be a safe haven in the event of war? Or in the event of a hyperinflationary event such as the closure of the Strait of Hormuz.
Bitcoin is the only thing that exists in absolutely finite quantity and can be owned. Just memorize 12 words…
It is the ultimate safe haven against inflationary shocks as well as the horrors of war. See the credit cards of Ukrainians that no longer work abroad. Only those who had bitcoins were able to escape instead of being forcibly conscripted into the army.
Regardless, bitcoin has already erased its losses, back above $66,000 as of this writing. Still the $100,000 in the sights.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
