Bitcoin Takes a Hit After Israel-Iran Tensions Flare
Bitcoin dropped sharply Friday as markets reacted to news of Israeli airstrikes in Iran. The conflict sent shockwaves through global markets, and crypto was no exception. After holding steady above $107,000 since early June, Bitcoin briefly dipped under $103,000 before settling around $104,815—down about 2.23% in 24 hours.
The move raised eyebrows, especially among those who’ve long argued Bitcoin acts as a “digital gold” during crises. If that were true, you’d expect it to hold up—or even rise—when traditional markets wobble. But this time, it didn’t. Gold, meanwhile, edged up 0.85%, while oil spiked 5%. S&P futures? Down 1.5%.
Gold vs. Bitcoin: The Safe-Haven Debate
Peter Schiff, a well-known gold advocate, didn’t waste time pointing this out. In a tweet, he mocked the idea of Bitcoin being a digital version of gold, noting how investors fled to the yellow metal while dumping crypto. And sure, on the surface, it’s hard to argue. When things get shaky, people still seem to trust gold more.
But Bitcoin supporters fired back. Adam Back, CEO of Blockstream, brought up past crises where Bitcoin not only recovered but outperformed gold and stocks. Take January 2020, when U.S.-Iran tensions flared—Bitcoin jumped 20% in two months, while gold managed just 6%. Even during the Russia-Ukraine war in 2022, Bitcoin gained 15% in 60 days, beating gold’s 9%.
Then there’s March 2023, when U.S. banks started collapsing. Bitcoin soared 32% in two months. Gold? Up 11%. Stocks? A measly 4%. So yeah, Bitcoin’s had its moments.
Short-Term Panic vs. Long-Term Trends
The thing is, Bitcoin’s volatility cuts both ways. It drops hard when fear spikes, but it also bounces back faster—and sometimes stronger—than traditional assets. During the COVID crash, it lost 25% in weeks, then gained 21% two months later. After the 2020 U.S. election, it skyrocketed 131% in 60 days.
Some insiders, like Andrei Grachev, think Bitcoin needs deeper ties to traditional finance to smooth out these wild swings. A Nasdaq listing, for instance, could lure more institutional money, maybe even steady the ship.
For now, though, Bitcoin remains what it’s always been: unpredictable. Geopolitical shocks rattle it, sure. But history suggests it’s too early to count it out.
