For years, various issues and news have been known to affect the crypto market. However, the market, especially the Bitcoin market, has on a few occasions managed to rise above the tide and remain unaffected. Case in point is the news of an alleged market manipulation conducted by crypto exchange Bitfinex. Another one was the reported cyber attack or security breach that was visited on Binance and led to a loss to the tune of $40 million. Both events happened in early 2019. Still, it's not guaranteed that the same scenarios will play out in 2020.
Following the news, many expected the crypto market to react, but that wasn’t the case as Bitcoin held strong. However, as can now be demonstrated, there are some far-reaching issues and geo-political events that can actually make the market react. One of these events is the ongoing feud between the United States and Iran.
The first of January 2020 was a dramatic period, something that not many people expected. The US President Donald Trump ordered the assassination of an Iranian top military leader, General Qassem Suleimani. Qassem was the leader or commander of Iran’s Quds Force – the country’s foreign military wing that has been operating in various countries across the Middle East (especially Syria, Iraq, Lebanon, and Yemen). Sometime back, the US designed the Iranian Quds Force as a terrorist organization.
On January 3rd, 2020, General Quassem was killed in an American drone strike while leaving an airport in Baghdad, Iraq. Following his killing, Iran vowed to retaliate. A few days later, the Iranian military fired a barrage of missiles at two military bases in Iraq that housed US troops. The bad blood between the two countries has sent shock waves across various markets, including oil whose price shot up by 4% following the incident. The crypto industry followed suit.
Evidently, various popular members of the crypto community seem to agree that, indeed, the hostility between Iran and the US has affected crypto prices. As a matter of fact, Bitcoin seems to be the most active crypto whose price volatility has been affected. However, while some other economic sectors might have taken a bad hit, the crypto market, especially Bitcoin, as well as Gold and Silver, seem to have gained value. In a tweet, one Michael Novogratz, a Bitcoin investor, expressed his conviction in this regard.
Michael wasn’t the only crypto investor watching the trend and noticing the effect that the geopolitical situation was having on the market. One Holger Zschaepitz took to twitter to share his thoughts too.
Crypto As A Safe Haven
According to some analysts, one of the major reasons pushing up crypto (Bitcoin) prices up is its attractiveness as a safe haven that is unaffected by the wider economic effects as a result of geopolitical conflicts and sanctions. One crypto trader Ran Neuner shared this point in a tweet.
Various other investors seem to share this opinion.
However, it’s still not yet clear for just how long this apparently bullish market effect could play into the future.