The value of Gold and Bitcoin are currently on an uptrend as investors opt for safe havens in the wake of Iran’s missile attacks in response to the elimination of Qasem Soleimani by the U.S. Gold rallied to $1,600, this is the highest the traditional asset has hit since 2013; BTC, on the other hand, is on a 7-week high having hit the $8,400 mark.
Market Analysts have speculated that the ongoing bull run might continue if the tension between U.S and Iran persists. Both Gold and BTC have since shown significant potential to break existing resistance levels in the past week;
The January 8, attack by Iran on U.S camps based in Iraqi fueled the mood of uncertainty in the markets despite an assurance from President Trump tweet that ‘All is well’.
All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning.— Donald J. Trump (@realDonaldTrump) January 8, 2020
Contrary to the norm, the volatile crypto assets have responded better than the S&P 500 listed stocks. The market dropped by 1.3% following the attacks while counterpart assets that have been considered more volatile surged by close to 20%.
Crypto Prospects in 2020
This year has kicked off on a high note for cryptocurrencies although the high volatility remains a constant factor for the digital assets. An end-year analysis report done by SFOX has shown that Bitcoin, however, becomes more stable towards the end of 2019. The leading digital currency had a lower correlation of – 0.037 to the S&P market index compared to that of Gold which stood at 0.149. It was also notable that BTC’s dominance is becoming more cemented as its correlation with other altcoins dropped from 0.7 to 0.4.
According to the SFOX stats, Bitcoin had the highest ROI at 93.8% followed by Gold at 52.8% and finally the S&P 500 whose returns averaged 29%. This, however, did not place the former as a better investment given the high risk associated with cryptocurrencies.
The U.S. - Iran Conflict Effect on Crypto Prices
As you can see from the chart below, this pre-war between the US and Iran is causing a significant amount of users to head to Google to search for "Bitcoin Iran" -- Although it's not clear whether they are looking to jump into a safe haven or checking to see how these attacks are affecting prices.
Updated. pic.twitter.com/H03MDBMcIp— Travis Kling (@Travis_Kling) January 7, 2020
Crypto analysts have speculated a surge by the digital assets if the Middle East gets more uncomfortable. This is chiefly because of speculation by crypto investors who are optimistic that money will flow towards these assets as alternative safe havens to gold. However, some analysts have deferred with the opinion arguing that the surge is a price correction and can only hold if BTC breaks past the $8,800 mark.