Bitcoin Hikes 20 Percent Since Tension Erupted Between US and Iran

RIO DE JANEIRO, BRAZIL – Since January 3rd, global financial markets have been in a tense atmosphere, wary of events between the United States and Iran and the chance of a new war in the Middle East.

However, while some stocks and bonds retreat, Bitcoin and other cryptocurrencies see a strong upward trajectory, with the world’s largest digital asset accumulating gains of about 20 percent since the US attack that killed Iranian general Qasem Soleimani.

In recent years, enthusiasts have come to call Bitcoin “digital gold”, reinforcing the potential use of crypto active as a value reserve. Gold, considered one of the safest assets in the world, has also recorded a rise of approximately three percent since the onset of the crisis in the Middle East.

As soon as the first news about the American attack emerged, Bitcoin jumped from US$6,900 to around US$7,300, remaining at this level until Monday night, January 6th, when it rose to US$7,900, showing resistance to exceed US$8,000, which had not happened since late November.

However, this resistance broke last night following news that Iran attacked bases in Iraq where American troops are stationed. In Brazil, gains were reduced in the last hours, standing at 1.5 percent in the accumulated 24 hours, to R$32,960.

In a report, analysts from Credit Suisse highlighted that the geopolitical “black swan” (a rate, unpredictable event with severe consequences) outbreak between the US and Iran had clear implications for some commodities, such as gold, oil, and Bitcoin, but that in the case of the fiat currencies, such as the dollar, this event’s impact is still unclear.

This is not the first time a rise has been noted in the price of Bitcoin amid increased tension in the market. In more specific cases, some countries in crisis such as Venezuela and Argentina have recently seen a sharp rise in the value of the digital currency, suggesting its use by investors to escape economic uncertainty.

Experts and cryptographers further note that, unlike what has occurred in other instances, this upward motion has focused mainly on Bitcoin, which has thus increased its dominance to approximately 69 percent of the digital coinage market.

It is important to note that the market has been experiencing a favorable period for some months now, due to the expectation of the so-called “halving”, an event in which the miners’ compensation drops by half. This is expected to occur in mid-May this year.

Currently, for each mined block, the award is 12.5 bitcoins, a figure soon to be halved. As a result, even if the demand for Bitcoin remains unchanged, there will be upward pressure on its price.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error