Is Bitcoin still a safe haven during geopolitical tension, or should you only turn to gold and the US dollar?

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Last Updated on 15 April 2024 by CryptoTips.eu

What impact would a war between Israel and Iran have on your crypto portfolio and could it impact the halving, which will take place at the end of this week. Geopolitical tensions (such as the risk of war in the Middle East) normally have major consequences for various asset classes, including equities, fiat currencies and cryptocurrencies, oil and various commodities.

During major geopolitical risks, investors tend to rebalance their investment portfolios and often turn to assets considered safe havens. In the past (more specifically the period 2018 to mid-2022), these were Bitcoin and gold. Is Bitcoin still among them or is it now only gold that is considered ‘safe’? And will this tension cause the US dollar to rise (which in turn is bad news for Bitcoin)?

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Because both Israel and Iran are located quite strategically on the center of the world map, a major war between those two countries would have far-reaching consequences. Investment funds will therefore rebalance their portfolios depending on what happens in the coming days.

Gold has been a ‘safe haven’ for investors for centuries, and the price of the precious metal rose had already risen to a record earlier this year. For example the cryptocurrency PaxGold, which tracks the price of gold, briefly rose to $3,000 when Iran fired missiles this weekend.

The US dollar also normally strengthens during an international conflict, as investors purchase large and well-known currencies to protect themselves against fluctuations (the Euro, the pound and the Japanese Yen can also benefit from this movement).

Until a few years ago, Bitcoin was also considered a safe haven during conflicts, but this could be different this time round due to the billions in investments that the Bitcoin ETF funds have brought with them. The expected sales wave just before or after the halving (expected by technical analyst Peter Brandt) could also throw a spanner in the works. It will be important to see how this conflict escalates and whether the Bitcoin floor support, currently around $58,000, holds if further downward pressure develops.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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