The military operation of the USA and Israel against Iran will positively affect the quotes $BTC . This opinion was shared by analysts from the London Crypto Club.
The conflict in the Middle East, resulting in the death of Ayatollah Ali Khamenei, may become a catalyst for the rise of Bitcoin. Experts David Brickell and Chris Mills referred to the incident as a "narrative catalyst" that the market has long awaited.
According to them, the recent lag of digital gold is the result of a regular cyclical correction.
Initially, it was pressured by tightening liquidity in the U.S., then it was caught up in a wave of rotation from tech stocks amid fears surrounding AI. This made many doubt the 'narratives of Bitcoin' and its role as a macro asset. However, the fundamental qualities of the cryptocurrency have not disappeared, analysts noted.
Two scenarios
The first scenario is a protracted war. In this development of events, experts expect an 'extreme flight to safety', in which investors will start buying the first cryptocurrency as 'protection against the collapse of existing economic and political structures'.
Contrary to logic, Bitcoin will be among the beneficiaries alongside gold, believe Brickell and Mills.
The second option is a quick resolution of the conflict. If U.S. President Donald Trump announces an agreement, a 'peace premium' will emerge in the market, and Bitcoin will rise on a wave of euphoria.
In any case, the Fed will inject more money into the financial system to support military actions, which will boost the cryptocurrency market, analysts emphasized.
'Sell-offs of risky assets amid wars are usually very short-lived, as conflicts lead to increased debts and deficits, requiring even more liquidity and the inclusion of the 'printing press' to finance the war,' they commented.
Historical parallels
The founder of BitMEX, Arthur Hayes, shares a similar opinion. He is confident that the Fed will move towards easing monetary policy to support U.S. foreign policy initiatives.
The expert referred to long-term data: U.S. military campaigns invariably led to an increase in federal spending and subsequent cuts in Fed rates. This became a positive catalyst for markets, including the cryptocurrency market.