The start of the New Year unexpectedly brought a sharp escalation in the already simmering tensions of the Middle East. After the killing of the prominent, if not the most famous general all of Iran’s revolutionary guard, it became clear that one of the most powerful countries in the region will not take this sitting back. However, not many expected a direct attack that occurred then the revolutionary guard launched a barrage of rockets on two bases in Iraq.
The same ballistic rockets landed in locations inhabited by the US troops stationed there. The news of this broke as the attack was unfolding and soon began dominating the global discourse. This did not only took place in mainstream news media but also, more importantly, it saturated social media channels as well. In a record time that was measured in hours not days, the world was placed in panic mode. As the missile attack finish, all eyes were on the US and its response to this incident.
At that point, all cards were on the table for President Donald Trump and all options, including an all-out war between the two nations, seemed completely possible. As the world stood on the brink of one of the most dangerous conflicts since the end of the Cold War, the crypto market reacted as well. Unsurprisingly the price of bitcoin and other big cryptocurrencies jumped up almost immediately.
Only a few days ago, the world watched with terror and anxiety about what will happen next in the Middle East. As the rocket took flight, so did the money of worried investors who turned to well-known safe havens. In history, these situations were almost exclusively accompanied by a rush to invest fiat currency into gold. This precious metal served as a secure investment for centuries and helped many during tumultuous periods. The same role included becoming an investment target during economic depressions, but also much more immediate events like wars.
Yet, the early 21st century is a time unlike any other. Over this period, when esports are growing faster than traditional ones and companies holding social media franchises, consider creating their parallel global infrastructure, gold will no longer do on its own. Because of this, for the first time in many months, bitcoin got a chance to shine. This also created an interesting insight into the future potential of not just BTC but the entire cryptocurrency market, including its major altcoin players, but also smaller crypto alternatives.
The chain of events started with a very dramatic moment – an international political assassination. Qasem Soleimani, an Iranian general was killed in a US missile strike on a column of vehicles just outside of the Baghdad airport. Here, the general arrived as an official visiting Iraq and he traveled in the open. The same figure was the leading one in the Quds force, a fraction of the Iranian Revolutionary Guard Corps designed for international activity. With the prominence of the killed military figure, many analysts immediately concluded that the region just made a big step into deep uncertainty. Others argue that the same happened to the entire world, thanks to one resource – oil.
With a potential massive conflict between the US and Iran, all of their regional allies would be pulled into the same showdown as well. This would eventually mean a big impact on oil prices and even oil accessibility. The process could in turn easily kickstart a huge financial crisis that would envelop the world in a matter of weeks if the conflict continues for that long. That is why the price of crude oil went up global stock markets took a device and all wanted to find some financial cover. The same this time encompassed bitcoin as well, which quickly rose on the same occasion. Altcoin markets followed suit and soon ethereum, XRP and many other cryptocurrencies in the top 10 list according to price and market share reacted in a very similar manner. It was clear – there was a sudden rise in people interested in cryptocurrencies and those who are already investing in it.
Not expectedly at that moment, bitcoin rose sharply for around 20 percent in a space of just a few days. It went from $7,000 to over $8,300 and investors took notice. This process of price increase followed the pattern of negative events. This means that with every bad headline, the price took off a bit more. Lastly, when the tensions died down in the wake of the US choosing not to respond to the attacks on its Iraq bases, tensions began to fall.
Yet, through this short period, bitcoin still managed to demonstrate that many people across the globe – potentially even institutional investors or even family office funds – see it as a valid safe haven in times of crisis. The original creators of the network had something like this in the minds of the BTC token once it began spreading globally.
Growing Strengths of Cryptocurrencies
The times are slowly but surely changing for the cryptocurrency domain, especially bitcoin as its most prominent representative. The currently endless trade war between China and the US shows no signs of stopping. In the same nauseating process, even small breaks or hopefully negotiation news bits are drowned out by a sense of general instability, especially in the US on account of President Donal Trump.
All this is something that is already in its second year and even the most skeptical about cryptocurrencies have to start to notice them now. Furthermore, no country in the world right now can showcase impressive financial security or even economic growth. Instead, most feel that the world is nearing another major recession.
Upcoming events like Brexit, which is still in a state of total and utter chaos. While the financial crisis is potential in the more distant future, so far all signs show that 2020 will be difficult no matter what. In that environment, no one with capital to protect and safely move in times of trouble can afford to completely ignore bitcoin.