Analysts at the London Crypto Club, a crypto community of traders and investors from the UK, have stated that the Israeli-US military operation against Iran could be a positive factor for Bitcoin and the entire crypto market.
They believe the escalation in the Middle East has become the catalyst the market had been expecting in recent months. They view the decline in Bitcoin prices amid news of the conflict as a normal correction within the current market cycle.
Analysts noted that some investors have questioned Bitcoin’s ability to serve as a safe haven during times of economic stress. However, they say the fundamental characteristics of the world’s leading cryptocurrency remain unchanged.
If the military standoff with Iran drags on, investors may begin buying Bitcoin en masse as a hedge against potential economic and political upheaval. In this case, experts believe, the world’s leading cryptocurrency could be among the main beneficiaries, along with gold.
In an alternative scenario—if the conflict ends within a month—a wave of optimism could emerge in the markets, which could also support growth in BTC prices.
“Risk asset sell-offs during wars are usually short-lived, as conflicts lead to increased debt and deficits, requiring additional liquidity and the ‘printing press’ to finance the war,” noted analysts at the London Crypto Club.
According to their assessment, the US Federal Reserve may increase the volume of liquidity in the financial system to support the economy, which would potentially become an additional driver of growth for Bitcoin and the crypto market.
Earlier, analysts at Wintermute warned that a protracted conflict between the US and Israel on one side and Iran on the other could, on the contrary, trigger a massive sell-off in high-risk assets, including Bitcoin.
