Bitcoin plummeted on Saturday amid a frightening escalation of geopolitical tensions. Prices fell more than 10%, from around $70,000 to $62,000, with some altcoins down more than 15% following news that Iran's fundamentalist rulers have launched a major airstrike on Israel did. Cryptocurrency markets rebounded slightly following reports that Israel and its allies shot down more than 99% of incoming drones, cruise missiles, and ballistic missiles, but Bitcoin remained close to $65,000 by Monday morning. It was being traded.
While the crisis appears to be abating, at least for now, this horrifying episode echoes one of the crypto world's favorite narratives: Even if the world goes to hell and countries collapse, Bitcoin will remain worthless. This is a new challenge to a story that will flourish as a story. In fact, as the sudden price drop over the weekend showed, investors are more likely to dump Bitcoin than buy it. Meanwhile, gold, seen by many as the ultimate true store of value, rose at the height of the crisis over the weekend.
Bitcoin's sudden drop triggered a wave of liquidations after the price initially fell on news of the war, as some traders with over 50x leverage were unable to cover their positions, leading to further selling. It is true that it has been accelerated by In contrast to these short-term traders, there are many more people who hold Bitcoin for the long term. And you can bet that most of them have never sold or even been tempted to sell.
Still, the fact remains that more people chose to sell Bitcoin than buy it during the recent geopolitical crisis. The broader market treated Bitcoin as a risky asset and fled to traditional safe-haven assets such as gold, bonds, and the US dollar. Regardless of whether the broader market view is correct, that's what happened when Iran started firing missiles.
While Bitcoin cannot claim to be an economic safe haven, at least for now, this weekend's events suggest that the crypto market may serve something else: an early warning signal. It shows that there is. Unlike traditional markets, cryptocurrency exchanges operate 24 hours a day. Meanwhile, many in the crypto industry are closely monitoring geopolitical events. These conditions mean that crypto prices are the first to react to major news events, and if those events occur outside of market hours, they are a good indicator of what will happen at the opening bell. may function as. There is no doubt that people are already working on developing trading algorithms to make that happen.
jeff john roberts
jeff.roberts@fortune.com
@jeffjohnroberts
decentralized news
FormerAmazon An engineer was sentenced to three years in prison for stealing $12 million from two cryptocurrency exchanges. (tech crunch)
Prosecutors said the Mango Market hacker, who is on trial for stealing $110 million, searched the web for terms such as “elements of fraud” and “statute of limitations.” (bloomberg)
of IRS Commissioner’s Criminal Investigation Division said the agency is bracing for a significant increase in crypto-related fraud and evasion cases. (cointelegraph)
Chief Legal Officer and Chief Communications Officer of an Asset Management Company Global XThe company is the latest to leave after trying and failing to become a player in the Bitcoin ETF space. (WSJ)
The SEC is dapper lab, known for its NFT partnerships with the NBA and NFL, has decided to dismiss the lawsuit. (luck)
Meme-O-The-Moment
This is the web version of Fortune Crypto, a daily newsletter about the coins, companies, and people shaping the crypto world. You can apply for free.
