In times of geopolitical instability, historically, Bitcoin (BTC) has seen significant volatility as investors of the financial markets shift their liquidity towards safer assets — including riskier cryptocurrency assets.
What you'll learn 👉
Russia-Ukraine Invasion
Russia invaded Ukraine on Feb. 24, 2022, when BTC price was roughly $39,000 — down from around $44,500 just a week prior. The downturn stemming from the impending invasion of Ukraine posed aversion to risk and uncertainty among investors.
By March 1, 2022, BTC price had recovered almost completely back to around the $44,000 mark. Following the peak of volatility, BTC price saw an uptrend towards $48,000 at the end of March, 2022, only to steadily collapse through the year — beginning 2023 at around $16,600.
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Show more +Israel-Palestine
Hamas attacked Israel on Oct. 7, 2023, when BTC price was roughly $28,000. In contrast to the Russian invasion of Ukraine, BTC price fell less than 6% to roughly $26,500 over the following five days.
By Oct. 25, 2023, BTC price reached $35,000 only to stumble almost 5% by Oct. 27, 2023, when Israel invaded Gaza. Starkly different to the price volatility of 2022, BTC price broke $40,000 by early December 2023, and went on to break above $73,000 for the first time on March 12.
What to Expect
In light of the retaliatory attack on Israel by Iran — BTC price crashed from highs of $67,000 just two hours ago to current lows of $62,000 at the time of writing.
As geopolitical tension escalates — Israel expects Iran’s salvo to hit by 23:00 GMT — market risk asset sell-offs are likely to continue, as liquidity seeks safer havens as a store of value.
However, interestingly gold — typically considered a safer store of value — has witnessed a sharp downturn in price, losing around $100 per ounce within the last five hours. Besides, this downturn could be indicative to a more widespread sell-off as investors move away from multiple asset classes or recoup losses.
Potentially the result of a panic response to immediate global economic implications, the months ahead now look to be setting up a bleak outlook of a bearish start to the summer.
Less than a week away from the Bitcoin 2024 halving event — with many miners preparing to have their earnings cut in half — the timing of this geopolitical event makes for the perfect cryptocrash storm ahead.
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