A number of analysts have come forward to dismiss the overall effect of US-Iran tensions on Bitcoin’s recent spike. Nonetheless, mainstream media took to the narrative of Bitcoin being a safe haven asset during the US-Iran tensions raising the question; is Bitcoin (BTC) really a safe haven asset in times of war?
“Innocent and desperate Iranians look for a way out”
Bitcoin’s price in Iran has seen massive appreciation on LocalBitcoins, a peer to peer crypto exchange, leading to calls of BTC demand increase in the country.
The escalated tension between Washington and Tehran, following Trump-activated drone strike on the head of Iranian Revolutionary Guards’ elite Quds Force, General Qasem Soleimani, has nothing to do with the $400 surge in Bitcoin’s price, an analyst commented on Friday.
Speaking on the issue, founder of Messari crypto, a crypto analytics firm, Ryan Selkis believes the hike in price is more about the retail holders wanting to dispose the top crypto rather than an increase in adoption rates within the country. He said,
“Bitcoin is trading at nearly $24,000 in the USD equivalent of Iranian Rials on LocalBitcoins today. It’s unlikely those purchases are paying for the Iranian military’s response. Instead, it might be innocent (and desperate) Iranians looking for a way out of the coming chaos.”
However, with BTC’s price tripling in Iran on P2P crypto exchange, Localbitcoins, whereby 1 bitcoin is trading at 1,000,000,000 Iranian rials, approximately $24,000 USD, the effect of the protracted “war” on BTC’s price cannot be discounted off.
The constant back and forth between analysts on the effect of Iran-US war tensions boils down to one question. How safe is Bitcoin as an asset in Iran, the US and neighboring states?
Is BTC a safe haven asset?
(It is with a heavy heart that I write this given the lives at stake with the two states on the brink of a war in 2020)
While BTC seems to be benefiting directly from the tensions between US and the Middle East nation, with the price shooting up over 5% in the past 24 hours, the asset was not the only one to move on the news that Qasem had been killed. Oil shot up by 1.5% in hours following the announcement, Gold slightly increased by 1.2% and defense stocks on the NYSE shot up to in preparedness of a potential war brewing in the Middle East.
With BTC holding value in times of distress in both the countries, heavily outshining the rest of the safe assets in the mini-rally, a case is made for the coin being a safe haven. For Iranians and US citizens caught in a battle for supremacy between the two capitals, I pray for the best.