- January 8, 2020
- Posted by: icoblock
- Category: Uncategorized
News keeps coming from the Middle East, as the US recently announced that the general of the Iranian Revolutionary Guard’s Quds Force, Qasem Soleimani, has been killed in an airstrike. In retaliation, Iran launched missiles at two US military bases in Iraq. Amid all this, the prices of oil, gold, and Bitcoin, surged. Is there any correlation?
Iran Versus the U.S.
Last week, the President of the United States ordered an airstrike at Baghdad’s airport, which killed the head of the Iranian Revolutionary Guard’s Quds Force – General Qasem Soleimani. Naturally, this triggered a wave of responses in the whole world, as some feared that this could lead to full-scale war. Iranians said that they would avenge Soleimani’s death, and it appears that they have made good on their promise.
Earlier today, news broke out that the Middle Eastern country has carried out a ballistic missile attack on airbases housing U.S. forces in Iraq. According to the report, more than a dozen such missiles have targeted and hit the two airbases situated west of Baghdad, at Irbil and Al Asad.
The Pentagon confirmed the event, and at the same time, President Trump said that “assessment of casualties & damages [are] taking place now.” He also reassures the U.S. citizens that they have “the most powerful and well-equipped military anywhere in the world, by far.”
All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning.
— Donald J. Trump (@realDonaldTrump) January 8, 2020
At the time of this writing, there’s no official confirmation if there are any casualties from the attack.
The Markets React
As it happens regularly, whenever important news emerges, the markets react quickly.
Firstly let’s take a look at the popular stock market index – Dow Jones. It dropped with 200 points during the Asian trading hours.
On the other side, stand Oil, Gold, and Bitcoin. The crude oil (index WTI) noted a serious spike, going from $62.2 to over $65.5 in a few hours, before retracing to around $63.2. Gold followed the upwards movement, jumping to over $1,610 an ounce, which is the highest point it has reached since 2013. And then, there’s Bitcoin. BTC has been in the green for a few days now, but it continued surging in the last twelve hours, as well.
This had the cryptocurrency community debating whether or not there is any correlation between the similarity of the price movement. Portfolio manager Travis Kling demonstrated the way prices reacted to both events, and the similarities are rather obvious.
Having three different assets reacting similarly to each other raised questions and curiosity within the community. Previously, there have been indications that there is a negative correlation between Bitcoin and the traditional stock markets. Back in May, when the largest crypto was on the rise, the stock market was plummeting as a result of the U.S. and China trade war.
In any case, the events of late could suggest that Bitcoin is an asset that investors see as a store-of-value. Bitcoin has traditionally been disconnected from the rest of the traditional financial markets and is less or not at all affected by political and economic turmoil.
Enjoy reading? Please share: