Like other geopolitical tensions, it significantly impacts the cryptocurrency market. Here are the main aspects of this influence:
* Increased volatility and price decline:
* Geopolitical conflicts create uncertainty, which usually leads to a "flight to safety." Investors tend to pull money out of riskier assets like cryptocurrencies and move it into more traditional "safe havens" (e.g., gold, US dollar).
* The recent escalation between Israel and Iran has already led to a decline in prices of leading cryptocurrencies, including Bitcoin and #Ethereum . Bitcoin dropped below $103,000, while altcoins like Ethereum, Solana, and #XRP experienced even sharper declines (down to double-digit percentages).
* The liquidation of long positions (bets on growth) in the futures market also indicates a sharp change in investor sentiment.
* Bitcoin as "digital gold" or not?
* During certain periods of conflict escalation, Bitcoin has demonstrated properties of a "safe-haven asset," similar to gold, as its price could temporarily rise. This is explained by its decentralized nature and lack of ties to specific national economies.
* However, in other cases, as recent situations have shown, Bitcoin can fall alongside other risky assets. This indicates that its status as "digital gold" is not yet fully established, and it remains susceptible to overall market sentiment.
* Impact on oil markets and the global economy:
* The escalation of the conflict in the Middle East, especially the threat of blocking the Strait of Hormuz, may lead to a significant rise in oil prices. This, in turn, will negatively affect the global economy by increasing inflationary pressure and slowing economic growth.
* The rise in energy prices affects all sectors, increases transportation costs, and may lead to higher taxes in countries supporting their allies in the conflict. The deterioration of the economic situation usually negatively impacts the cryptocurrency market.
* Potential regulatory implications:
* In conflict situations, governments may introduce new rules or restrictions on the use of cryptocurrencies, which may affect their availability and usage in certain regions, as well as their market value.
* However, in some conflict zones, cryptocurrencies, on the contrary, may be used to circumvent sanctions or stabilize finances, which may promote their adoption in certain regions.
Forecasts:
* If geopolitical tensions in the Middle East continue to escalate, this is likely to further pressure the cryptocurrency market, causing increased volatility and possibly price declines.
* With de-escalation of the conflict, a rapid rebound and market recovery may occur as investors are willing to take on risks again.
