- Bitcoin’s use-case has evolved over time.
- Recently, the top cryptocurrency has been surging under the safe haven narrative.
- While both gold and bitcoin moved higher due to geopolitical risk, the cryptocurrency has significantly outperformed the precious metal.
Bitcoin’s primary use-case is continuously evolving. At first, many thought the cryptocurrency would be the next generation payment method. Scaling issues and extreme volatility deterred many merchants from accepting BTC.
At that point, critics thought that the virtual currency would die. But, the number one crypto proved to be resilient as its value proposition changed into a store of value and as the only non-correlated asset in the world. In the last week, bitcoin’s use-case is making another transformation.
An analyst tracked bitcoin’s performance as the turmoil in Iran escalated. It appears that one of the surprising consequences of geopolitical risk is bitcoin’s breakout from a six-month falling wedge. This could indicate that the top cryptocurrency is evolving to become a wartime safe-haven asset.
Bitcoin Outperformed Gold As Tumult In Iran Intensified
Safe-haven assets such as gold, silver and even oil skyrocketed as tensions in Iran heightened. What’s surprising is that bitcoin’s value rose along with these commodities. A chart by Messari illustrates the timeline of the Iranian conflict alongside BTC’s price action.
It appears that the number one crypto is proving to be a safe haven asset at a time of armed conflict. Willy Woo, partner at Adaptive Capital, believes bitcoin just went through
its first successful beta test of being a war time safe haven.
It’s difficult to deny Woo’s claim. After all, bitcoin significantly outperformed gold while Iran and the U.S. were going at it.
Safe Haven Narrative Strengthened By Skyrocketing Google Searches
In addition to timing and price action, another factor suggests that people flocked into bitcoin to protect their wealth during the military conflict between the U.S. and Iran. Investing.com reported that the search term “Bitcoin Iran” soared by 4,450% between Jan. 1-8. The term “bitcoin” also received a healthy boost as it climbed all the way to a score of 100 on Jan. 8 from just 45 a week ago.
Staunch bitcoin critic Peter Schiff doesn’t buy bitcoin’s safe haven narrative. According to the gold bug, investors are speculating on the cryptocurrency hoping that people would buy the safe-haven use case.
Regardless of what Schiff says, the charts don’t lie. Both bitcoin and gold climbed as geopolitical risks were heightened. Interestingly, both assets corrected as the U.S. and Iran chose to de-escalate the conflict.
Is it safe to say that bitcoin is now the new safe-haven asset? I say it is way too early to tell. At the very least, the number one cryptocurrency has gone through a successful beta test.
Disclaimer: The above should not be considered trading advice from CCN. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.
This article was edited by Sam Bourgi.