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Bitcoin Surging Toward $8,000 As Speculators Bet on It Becoming a Safe Haven Asset

As the Russian Orthodox Church celebrates Christmas Day today (January 7), Bitcoin HODLers around the world are celebrating the fact that Bitcoin is now trading at the highest level it has been since 20 November 2019.

According to data from CryptoCompare, Bitcoin started the year at $7,174. Since then, it has gone up almost 10% since it is currently (08:40 on 7 January 2020) trading at $7,888, up 4.65% in the past 24-hour period:

This surge toward the $8K level has reversed the losses suffered during the past seven weeks, and it has brought the Bitcoin price to where it was on 20 November 2019, as you can see in the three-month price chart shown below:

Within the crypto community, there are three competing explanations for the great start to the year that Bitcoin has enjoyed:

One man who remains highly skeptical of Bitcoin despite Bitcoin outperforming gold in the first week of 2020 (and more importantly despite admitting that Bitcoin was the top performing asset of the previous decade) is gold bug Peter Schiff, who isthe CEO of Euro Pacific Capital and Chairman of SchiffGold.

Here is what Schiff said on January 2:

This is what he had to say on January 3:

And finally, this is Schiff tweeting about Bitcoin yesterday:

Schiff has undoubtedly said many silly things about Bitcoin in the past, but it is hard to argue with his assertion that Bitcoin is "being bought by speculators betting that investors will buy it as a safe haven."

Here is what highly-respected macroeconomist and crypto analyst/traderAlex Krger says about this comment by Schiff:

Featured Image Credit: Photo via Pexels.com

Continued here:
Bitcoin Surging Toward $8,000 As Speculators Bet on It Becoming a Safe Haven Asset - CryptoGlobe

While much of the world may have been tuned into the 77th Golden Globes awards to see who took home the award for Best Motion Picture, Bitcoin investors couldnt take their eyes off the weekly candle close last night.

The first-ever cryptocurrency has been stuck in a downtrend for months, and last nights close was bulls best opportunity to close out the week on a bullish note. But instead, Bitcoin closed its sixth consecutive week in a row under the critical resistance level of $7,500.

Bitcoin price has been falling since June, with very few signs that the leading crypto asset by market cap is ready to reverse. After a third retest of lows was swiftly defended by bulls earlier in the week, it gave hope that the weekly close last night could be the first in over a month to close above the key level of $7,500.

Related Reading | The Most Lucrative Signal in Bitcoin History Just Flipped Buy

However, a short-lived selloff kept the price at bay leading up to the important weekly close, falling short of $7,500 for the sixth straight week in a row.

Six weeks of trading below a resistance level with multiple failed attempts doesnt appear to be very bullish for Bitcoin and the crypto market, however, altcoins have been breaking out today, suggesting that BTC could soon follow.

Bitcoin is currently trading at around $7,530, trying to make its way through the overhead resistance and break higher.

While things do look bleak for bulls, repeatedly failing to break and close above $7,500 on weekly timeframes, the asset is currently trading above that price, and after sending those six weeks below $7,500 building a base, support could end up being stronger than the resistance, and one side will eventually give way causing this weeks close to be lucky number 7.

Former IMF economist Mark Dow had been advocating for crypto traders to wait for such a base to be built much like the base it built back when it bottomed at the bear market low trading range around $3,000. At that time, many tests of support held up, and eventually, resistance failed, causing the asset to skyrocket.

If Bitcoin is once again building a base and readying a breakout, the bull run may be back on. The last time this occurred, Bitcoin rallied from $3,000 to $14,000, bringing investors a 350% return before falling back to current prices.

Related Reading | Crypto Comeback: After Two Years of Bear Market, Bitcoin And Ethereum May Be Ready To Rebound

Should a similar breakout and rally follow, Bitcoin could set its sights on setting a new local high. If its able to take out its previous all-time high at $20,000, a new bull market will be confirmed and serious FOMO should boost the crypto market to new heights once again.

Original post:
Lucky Number 7? Bitcoin Closes Six Consecutive Weeks Below $7,500 - newsBTC

Last year was pretty dismal for the bitcoin and crypto industry in India. Regulatory procrastination and a negative outlook from politicians have stifled the ecosystem and innovation, will 2020 be any better?

The Reserve Bank of India (RBI) has been relentless with its disapproval towards bitcoin and the crypto industry over the past couple of years. Bankers and politicians remained resolute in their stance on digital assets during 2019 as Supreme Court hearings got left on the back burner.

According to reports, Union Finance Minister, Nirmala Sitharaman, remained cautious on cryptocurrencies in her speech at the weekend. Her primary concern at the moment is one shared by many other nations Facebooks Libra.

She told reporters than many countries are cautions about rushing into this, and that the term stable currency or stablecoin should not be used to describe it.

Last year, the social media giant kicked the digital hornets nest with its plans for financial domination through its own crypto coin. Central banks across the globe were worried, and rightly so.

Reports last month indicate that the RBI may be joining the growing crowd of central banks researching their own digital currencies (CBDCs), in response to the threat of Facebook domination. China is already leading this particular race.

In December, RBI governor Shaktikanta Das stated that the bank was very clearly against any private digital currency. Bitcoin, however, is the complete opposite, but it is unlikely that Indias central bank will change its stance on that anytime soon either.

There was a little light at the end of the 2019 tunnel when Binance acquired Indian bitcoin exchange WazirX, with plans to create a fiat onramp for the Rupee.

Company chief executive, Nischal Shetty, said that a CBDC would be of major benefit to Indians, and open the doors for further innovation in the crypto asset space. In an interview with bitcoin.com, he was asked about the RBI ban, Supreme Court hearing, and possibility of it being lifted;

I really hope they do. I think well see some solid progress with the case in 2020 as the matter has reached a stage where its being heard in court.

As it stands, proceedings are set to resume sometime later this month when the hearing may finally take place.

Shetty stated that the government has taken its time over a cryptocurrency bill, as they want to understand the technology beforehand. He added,

Were confident that our leaders will engage with the crypto industry of India and then progress in the right direction.

He continued to assert that the state will eventually turn pro-crypto but that may not happen for another year or two. India will wait and watch other progressive nations before making any regulatory moves in crypto.

For 2020, he predicted more competition among exchanges, lawmakers and politicians taking positive steps towards understanding the industry with a view towards a regulatory framework, and a massive growth in DeFi markets.

What will 2020 have in store for bitcoin in India? Add your thoughts below.

Images via Shutterstock

See the article here:
What's Going to Happen with Bitcoin in India in 2020? - Bitcoinist

Financial commentators tend to lean bullish on Square (NYSE:SQ) stock as a targeted bet on the future growth of digital payments. I see this as a perfectly reasonable position, as millennials seem willing to give Squares Cash App a chance in a sphere once entirely dominated by the likes of Visa (NYSE:V) and Mastercard (NYSE:MA).

Source: Shutterstock

However, I believe theres more to the story.

Millennials and other demographic segments are becoming more aware of cryptocurrency, and Bitcoin (BTC) in particular. So, unlike the stodgy, payment-processing companies that have hesitated to embrace Bitcoin as a viable currency, Square is preparing for a blockchain-powered world right now. With that said, a position in Square stock could be a serious moneymaker if this gambit succeeds.

When Im on Internet forums, I sometimes get the feeling that investors divide into two mutually exclusive camps; Those who invest in stocks, and those who buy or HODL (hold on for dear life) cryptocurrency. The dividing line isnt necessarily generational, but Ive observed that younger investors seem more willing to give crypto a chance.

Theres something to be said for the safety of investing in long-standing Dow Jones components like Visa and Mastercard. However, now that millennials are Americas biggest generation population-wise, investors need to understand that point-of-sale payment processing has changed; and so has the way people perceive money itself.

The U.S. dollar has lost much of its value over the years. With that, Bitcoin has become an attractive alternative currency to open-minded consumers. In this regard, Square got a big head start compared to its old-school rivals. As early as November of 2017, the companys Cash App allowed its users to buy and sell Bitcoin.

Not everyone wants to open up a Coinbase or Binance account. Therefore, I feel that early Bitcoin integration was a savvy move on Squares part. The numbers bear this out, as Squares third quarter 2019 Bitcoin sales totaled an impressive $148 million. This represents a 20% increase in volume quarter-over-quarter, as well as a massive 245% year-over-year increase.

As a financial reporter, sometimes I gather information from interesting and unexpected sources. In this instance, I discovered a job advertisement on LinkedIn that teases a number of potentially new Bitcoin-friendly Cash App features. If these pan out, Square could end up being miles ahead of Visa and Mastercard in the crypto-integration department.

Along with a six-figure salary range and a daunting list of job requirements that would disqualify 99.99% of the population, the employment ad signals Squares eagerness to add Bitcoin functionality to the Cash App in 2020:

The Cash App continues to push the boundaries in finance and Bitcoin sits at the very forefront of these efforts. Cash Apps large and ever-expanding network of customers uniquely positions us to add utility to BTC and to bring Bitcoin to the masses in a user-friendly way.

Square investors already sensed the companys crypto-friendly vision. But, its still nice to hear it stated so forcefully and with a tone of commitment that I havent heard from Visa or Mastercard. However, its the next part of the job ad that indicated the Cash Apps potential upcoming perks:

[The chosen job candidate] will own the Crypto Investing product and be entirely responsible for growing its adoption in whatever ways you see fit, which could include tried and true growth tactics, new functionality (e.g. limit orders, auto-invest), or building entirely new features like BTC gifting (P2P).

Whether these Cash App features are actually built out in 2020 is immaterial. Square stock investors, if theyre also Bitcoin devotees, should be excited at the prospect of peer-to-peer (P2P) BTC gifting and auto-invest functionality.

Call me a visionary or a nut, but I can easily imagine a time in the near future when payment processors will have to integrate these types of Bitcoin-friendly features. The fact that Squarewants to move in this direction at this early stage is, to me, highly encouraging.

Maybe you like Bitcoin and maybe you dont; I can see the merit of both sides of the argument. Overall though, if youre willing to keep an open mind concerning Bitcoins potential to transform the way we use money, then you might consider HODLing some BTC; and while youre at it, some Square stock too.

As of this writing, David Moadel did not hold a position in any of the aforementioned securities.

Link:
The Bitcoin Angle Could Give Square Stock an Edge - Investorplace.com

On January 3, 2009, the pseudonymous developer(s) Satoshi Nakamoto bootstrapped the Bitcoin network by mining its first ever block, block 0. The Genesis Block, as it has become known, came etched with a message that would invariably position Bitcoin as an alternative monetary system to rival the realm of central banking: Chancellor on brink of second bailout for banks, the memo read, in reference to a headline about the U.K. governments actions during the global recession of 2008 and 2009.

The rest, as you no doubt know, is history. Eleven years on and Bitcoin has harnessed the fervor of a community that was inspired by the philosophical tenets embedded in the Genesis Block message. Bitcoins meteoric success in the past decade defied the expectations of believers and skeptics alike, and with a thriving market that has captured $130 billion in value, it has graduated from fringe interest to a global economic phenomenon.

To commemorate Bitcoins 11th birthday and usher in a new decade, we compiled some stats to plot Bitcoins growth from 2019 to 2020 and provide a hard picture of the state of the network today.

From 2019 to 2020, we saw the following year-over-year changes to Bitcoins market, network and technical infrastructure:

At the beginning of 2019, 601 contributors had provided 19,104 commits to the Bitcoin Core Github; these figures would grow to 22,536 commits from 678 unique contributors by 2020.

Bitcoins price increased from $3,860 to $7,180, an 85 percent increase from the onset of 2019 to the onset of 2020. This accompanied a doubling of bitcoins market capitalization from $65.5 billion to $131 billion.

Amidst the wider crypto market, bitcoins dominance (i.e., its share of market value compared to that of altcoins) climbed from 51.8 to 68.3 percent.

Bitcoins supply grew from 17,457,634 to 18,135,846 over the course of the year, an annualized inflation of roughly 3.8 percent.

Bitcoins daily transaction volume grew fivefold over 2019, from $4.3 billion to $20.2 billion by the first day of 2020.

On the first day of 2019, Bitcoins network logged 235,813 transactions; this would increase a modest 6 percent by the first day of the new decade to 251,867. Notably, over this timeframe, the percentage of SegWit transactions out of the total transactions surged from 33.4 percent to 62.2 percent.

The value of daily transactions on the network shot up from $1.4 billion on January 1, 2019, to $4.1 billion to ring in the new year in 2020. As the value of transactions on the network trends with the price, the networks all-time high transaction volume in 2019 was $21.3 billion on June 18, 2019.

The highest median bitcoin transaction fee in 2019 was $3.55, while the lowest median fee last year was $0.03. The latest data available for January 2020 shows a median fee of $0.07.

The total number of unspent transactions (aka UTXOs, or bitcoin that havent been spent and included as an input for a new transaction) rose from 49,591,771 to 64,530,177 over the course of 2019, a 30 percent increase.

Bitcoins blockchain size grew 29 percent, from 198 GB to 256 GB from the beginning of 2019 to the beginning of 2020.

Bitcoins hash rate experienced an explosive increase over 2019, jumping from 42 exahashes per second (EH/s) (or, 42,000,000,000,000,000,000 hashes per second) to 112 EH/s.

Mining difficulty more than doubled from the beginning to the end of 2019, rising from 6 T to 13 T.

Bitcoin node count across the board unfortunately dropped from 2019 to 2020. The total number of listening nodes (i.e., nodes that are publically open to connect to other nodes) fell from 6,344 to 5,859, a 7 percent decrease. The total number of active nodes fell a drastic 25 percent from 64,746 to 48,141.

The number of total active addresses rose from 433,715 to 524,360, a nudge of 20 percent.

The total number of (known) Lightning Network channels jumped from 21,130 to 36,130 by the end of 2019 for a 41 percent increase. The average capacity per channel decreased from 3,115,316 sats to 2,721,418 sats, a fall of 12 percent on the year.

2,297 Lightning Network nodes were operational at the beginning of 2019. This increased 114 percent to 4,923 by the start of 2020. The average capacity per node, however, fell similarly to the average capacity per channel from 45,781,712 sats to 34,693,516 sats, a 24 percent decrease.

525 bitcoin were locked in Lightning channels for a cumulative value of $1.9 million at the onset of 2019. At the time of writing, 853 bitcoin worth $6.2 million are locked in Lightning channels, representing a 62 percent increase in total capacity and a 226 percent increase in the value of this capacity.

The number of cut channels on the Lightning Network (i.e., channels between two nodes that serve as a bridge to otherwise disparate nodes by providing a routing path) increased from 518 to 1,567 from 2019 to 2020. These channels comprise 31.8 percent of the network at the time of writing.

Read more:
Happy Birthday Bitcoin! Here's a Look at Bitcoin's 11th Year by the Numbers - Bitcoin Magazine

Two well-known Bitcoin (BTC) figures have resorted to a painfully public Twitter exchange to settle an argument over a $20,000 unpaid bet.

The heated debate, which is ongoing, revolves around a pledge which investor Ronnie Moas made in 2018.

If Bitcoin was not worth $28,000 by the end of last year, Moas said he would donate the lump sum to FreeRoss.org, the charity working to free jailed former Silk Road owner, Ross Ulbricht. The bet was made with Vinny Lingham, CEO of blockchain identity startup Civic.

With BTC/USD trailing at $7,200 on Jan. 1, 2020, Lingham asked Moas to confirm he had made the payment as promised. Moas then surprised by saying he would no longer honor his commitment.

The tone swiftly became unfriendly, with Moas describing Lingham as a f*cking bastard and demanding he explain the near-total drop in the price of Civics native cryptocurrency, CVC.

I will keep my word and distribute $20,000 in 2020 to organizations highlighted at my website, he replied, explaining he would instead divide up the FreeRoss funds between up to five charities of his choosing. In an ironic twist, Moas advised Lingham:

Read my last three posts ... and the ones preceding from the last 24 hours you f*cking jackass ... stop making a fool out of yourself in a public forum.

Moas claimed he had more than a dozen reasons not to send money to FreeRoss.

Responses predictably sided with Lingham, as Moas had nonetheless reneged on the original terms of the wager.

As the argument gained traction, other Bitcoin figures, including What Bitcoin Did podcast host Peter McCormack, began pledging to replace the lost funds out of their own pocket. FreeRoss then thanked McCormack and his fellow participants, who each pledged $1,000, for their donations.

Further efforts continue to take place on the Bitcointalk forum, where users are selling collectible items.

They include an altered Venezuelan bolivar note, emblazoned with the heading Banco de Bitcoin and an image of Charlie Shrem in sunglasses. Shrem, who is now free, was also implicated in the highly controversial takedown of Silk Road by United States authorities.

Read more from the original source:
Ronnie Moas and Vinny Lingham Come to Blows Over $20K Bitcoin Bet - Cointelegraph

Bitcoin struggles to move out of the consolidation phase that began in late November 2019. Heres what it would take to trigger a BTC breakout.

After peaking at nearly $14,000 in June 2019, Bitcoin went through a corrective period that saw its price drop over 50%. The significant selling pressure took BTC down to the 61.8% Fibonacci retracement level where it has been hovering over the past two months. This Fibonacci retracement area is considered by many traders as the golden retracement zone due to the high probability of a rebound.

Yet, the buying pressure behind the pioneer cryptocurrency must increase to allow it to bounce off the current price levels. If volume indeed picks up, then Bitcoin could have the potential to surge to the 50% Fibonacci retracement zone that sits at $8,500.

Conversely, an increase in supply could push BTC below the golden retracement zone. Such a bearish impulse could trigger a major sell-off sending this crypto down to the 78.6% Fibonacci retracement level, around $5,500.

BTC/USD by TradingView

The ambiguous outlook that Bitcoin presents is also perceivable on its 1-day chart. Under this time frame, BTC can be seen trading between the lower and upper Bollinger bands since the beginning of December 2019. The low levels of volatility made the bands squeeze, which indicates that a period of high volatility is underway.

Due to the inability to determine which direction the flagship cryptocurrency will breakout, the current trading range between $6,880 and $7,660 is a reasonable no-trade zone.

A daily candlestick close below the $6,880 support level would likely be followed by a move down to the 78.6% Fibonacci retracement level. However, breaking above the $7,660 resistance level could take BTC to the 50% Fibonacci retracement level.

BTC/USD by TradingView

The market sentiment around Bitcoin is in fear, according to the Crypto Fear and Greed Index. As BTC continues to hover around $7,000, investors worry it could test lower lows extending the bearish trend it entered in June 2019. Based on the previous technical analysis, such a bearish perspective is extremely feasible. However, it remains to be seen whether the support or the resistance level will break first, which will determine the direction of the overall trend.

Originally posted here:
Bitcoin is on the Cusp of a Major Price Movement - Crypto Briefing

Over the past few hours, Bitcoin (BTC) has begun to gain momentum once again, pushing past $7,400 after remaining trapped under that level for the past two-odd days. As of the time of writing this, the leading cryptocurrency is trading for $7,470 registering a 2.22% gain in the past 24 hours. Altcoins have followed suit, posting similar slight gains across the board as bulls are stepping in.

Although already a strong performance, analysts expect Bitcoins gains to continue into next week, with some even going as far as to say that the cryptocurrency could top $9,000 by the end of the month, maybe sooner.

Cryptocurrency and forex trader Livercoin posted the below tweet on Saturday, showing that he believes Bitcoin has been trading like a textbook Wyckoff Reaccumulation-esque pattern over the past few days.

The textbook pattern, should BTC follow it to a T, suggests that BTC will break higher and higher in the coming days, in an upward move that will bring the asset back to the high-$7,000s.

Another analyst echoed this optimism, posting the below chart. In it, he notes that if BTC can break the neckline of the inverse head and shoulders pattern formed over the past five weeks, which it did, a 15% move to hit $8,500 could be had in the coming weeks.

Seeing that Bitcoin has broken past the neckline over the past few hours and may see an end-to-end Ichimoku Cloud move, the cryptocurrency could begin to act on this pattern, surging higher to the aforementioned target.

Also, Su Zhu, the chief executive officer of forex and crypto fund Three Arrows Capital,recently remarked on Twitter that he believes Bitcoins price outlooking heading into 2020 is looking rather bullish. The prominent commentator specifically cited his analysis of the BTC/USDT trading pairs and their premiums to BTC/USD markets and the overall price action, which shows there are clear signs of accumulation and money flow back into risk.

Original post:
Why Analysts Think Bitcoins Surge to $7,450 is Just the Beginning - newsBTC

For Bitcoins scaling solution, the Lightning Network, 2019 passed in a flash of innovation.

Developers made major progress in enabling large sums to be transferred across the network; the first neutrino mobile wallet was launched; the first Lightning conference opened; the first major exchange integration went live, and more. Huge milestones, as Ryan Gentry, lead analyst at crypto investment firm MultiCoin Capital, told Decrypt.

But for Lightning, a super-fast payments layer on top of the Bitcoin blockchain that allows users to send and receive bitcoin quickly and cheaply, 2020 promises plenty more thrills, and perhaps some spills too.

This is a very exciting time for Lightning, said Samson Mow, chief strategy officer at Canadian blockchain services provider Blockstream. For 2020, I expect to see continued growth of the network and further privacy improvements as well.

Payments on the Lightning Network are becoming easier, with developers anticipating further progress with multi-path payments. These allow for multiple channels to be used together in concert, meaning that payments can be split into smaller chunks. That, in turn, means that large amounts of bitcoin can be sent both quickly and cheaply.

But multi-path payments arent the only option being worked on.

Roy Sheinfeld, co-founder of bitcoin wallet and payment services provider Breez, said that the startup is working on asynchronous payments via Lightning Rod, a new offline-style payments protocol that will enable users to make payments without the need for mobile nodes to be online at the same time.

Channel capacity is also set to increase, he predicted. So-called Wumbo channels are in the works. These would not only remove the current 0.167 BTC channel limit, but leave payment participants free to set it as high as they wish.

Another upcoming innovation to look out for is Trampoline routing. This should enable clients to simplify their network transactions by relying on a so-called trampoline node to relay payments, instead of having to do it manually.

Well also see more exchanges jumping on board. Bitfinex just added support for the Bitcoin Lightning Network, and Bitfinex wallets can now send and receive bitcoin using Lightning.

In February, Twitter and Square CEO Jack Dorsey announced that Squares Cash App will integrate Lightning capabilities sometime in the future. Dorsey is a high profile Bitcoin cheerleader as well as an investor in Lightning; hes recently doubled down by funding the development of Lightning.

In the same month, Jeremy Welch, the chief executive of Casa, which provides Bitcoin multisig key security and Lightning nodes, told Decrypt that Dorseys support for Lightning via Square would simply be huge.

Messaging functionality is in the works, too. A peer-to-peer, instant messaging protocol, Whatsata portmanteau of WhatsApp and satoshiwas created for Lightning in November. It enables encrypted messages to be sent without the use of a third party, like Facebook or WhatsApp. For the time being, its free; implementing a low-cost version is the main challenge.

Theres even a Lightning ATM in development that will allow you to convert all your spare change to satoshi.

All that progress comes at a price, however.

For 2020, I'm anticipating tension between those on the network that want to onboard millions of users now, and those that want to go slow and prioritize user privacy first, said Ryan Gentry, lead analyst at crypto investment firm MultiCoin Capital.

Gentry questions whether the networks liquidity management tools are currently robust enough to handle a sudden influx of payments. It will be very interesting to see how the network holds up if a game like Litenite or Raiki goes viral, he said.

We have to check that the network can scale, that the clients can scale, admitted Sheinfeld.

Be the first to get Decrypt Members. A new type of account built on blockchain.

With Breez, Sheinfelds ultimate aim is to improve Lightnings UX. We want to obfuscate complexity, and make it a seamless experience, like with the Internet, he said. Lightning service providers, he believes, will play a leading role in onboarding users, performing a similar function to Internet Service Provider (ISPs).

If we want to provide UX thats on a par with fiat, were not there yet, but I think well be there in six to 12 months.

If the Lightning networks going to achieve mass adoption, it has some hurdles to overcome, thenbut its going flat-out. In the meantime, why not help things along by building your own Lightning node.

Read the rest here:
Why 2020 will be the best year yet for Bitcoins Lightning Network - Decrypt

At approximately 02.30 GMT today a US drone strike killed senior Iranian military leader Qasem Soleimani at Baghdads international airport. The event triggered a dramatic escalation in tensions in the region, with oil prices surging on the news. Bitcoin was not far behind; bouncing back from under $7k, the cryptocurrencys price proceeded to jump over six percent within hours of the attack.

But while a surge in bitcoins price would normally be an occasion for celebration among bitcoin maximalists, todays news met with a muted response on crypto twitter, and even denial. If the unwelcome prospect of another war in the Middle East is the price of bitcoins success, is it one crypto enthusiasts are willing to pay?

Political instability is often seen as a bellwether of crypto price, although economic stability remains the most important factor; the viability of bitcoin as a safe haven in the face of catastrophe is a common argument.

Today, it was given some credence. Gold prices climbed to a four-month high. Oil, meanwhile, shot up over 4 percent amid concerns of disruption to supplies.

There's a clear flight to safety among traditional assets with stocks declining (about 1.5%) across the globe and safe havens like gold and the Japanese Yen have seen minor gains as well, wrote crypto analyst Mati Greenspan in his daily newsletter Quantum Economics.

The surge in crude oil is to be expected, the surge in bitcoin is a total surprise, he added.

The blue line represents the price of crude oil, which reacted quickly to this morning's news, contrasted with BTC across various exchanges. IMAGE: Mati Greenspan.

Nevertheless, some doubted that the strike, and the political instability it unleashed, bore any responsibility for the surge.

Bitcoin maximalist and talk show host Peter McCormack quickly decried US President Donald Trumps action.

Others saw the rally as short lived, before business as usualor an overblown reaction. Yet the threat of war is very real.

The Pentagon had accused Major-General Soleimani, Irans highest ranking military official, of orchestrating attacks on US forces in Iraq, and says it acted in self defence.

Iran, meanwhile, has vowed to take action in response. US citizens have been told to leave Iraq, US military bases are on high alert and officials in the region told the Financial Times that they were braced for Iranian retaliation across the Middle East. From Israel to Saudi Arabia and even India and Pakistan, the entire region is on high alert.

"Certainly Iran is going to retaliate in some way. Theyre not going to confront the US directly but they will perhaps attack Saudi tankers again, maybe Saudi oil refineries," John Tirman, executive director at the Massachusetts Institute of Technology Center for International Studies, told Al Jazeera.

Part of bitcoins appeal is that, up to now, it has been uncorrelated to other, non-crypto safe haven assets such as gold, Matthew Graham, chief executive of Beijing-based Sino Global Capital, told Decrypt.

This history is not consistent with being a safe haven for geopolitical risk, he said. However, in our view, as bitcoin matures, its correlation with other assets is likely to increase. As part of this process, geopolitical and macroeconomic factors are likely to have increasing influence on bitcoins price.

He added that for similar reasons, in the long-term, bitcoin is likely to become more positively correlated with the price of gold, and there is already evidencesome in the past 24 hoursfor this view.

Following this logic, some speculated that Iranians could be buying up Bitcoin to counter the prospect of further sanctions. Others even suggested that the rising price could be due to cryptotraders speculating that Iranians are buying bitcoin.

Its clear that many crypto traders are closely watching events in Iran, Graham told Decrypt. In our view, its possible that this geopolitical risk factor impacted bitcoins price in combination with other factors, including a short squeeze. Overall, its important to not overstate the case, he added.

Greenspan held a similar view: The Iranian market in and of itself is likely too small and slow to have caused this move single-handedly. More likely, one or several players have been waiting on the side for a good buying opportunity below $7,000 per coin and it seems one has presented itself, he wrote.

There may be further cause for concern. Bitcoin itself is a concern for the US, as far as Iran is concerned

Almost a year ago, the New York Times reported that bitcoin is helping Iran to undermine US sanctions. These have cost Iran $200 billion in foreign-exchange income and investment, the countrys President Hassan Rouhani said on Tuesday.

Iran is moving to regulate Bitcoin, and mining was reportedly legalized in the country in August. Iran has also dangled the prospect of a national cryptocurrency over the world since February 2018. In December, Rouhani called on Islamic countries to create a Muslim cryptocurrency to fight US economic dominance.

But in the short term, as tensions escalate in the Middle East once again, bitcoin looks set to play its partwhether for sanctions busting or as a foil for speculation. And conflict could combine with global recession to increase the demand for bitcoin, gold and oil alike.

The good news? Even bitcoin maximalists are in tune with the old Edwin Starr hit:

War, huh, good god. What is it good for? Absolutely nothing.

Lets hope we dont get to find out whether that applies to bitcoin anytime soon.

Read the rest here:
New crisis in the Middle East: Good for bitcoin, bad for the world - Decrypt