“Chaos is good for bitcoin,” Michael Saylor wrote yesterday on X (Twitter) after the escalation of the war between Iran and Israel. The bitcoiner and president of the computer company, MicroStrategy, took to the social network to comment on the impact of the conflict in the Middle East on the bitcoin (BTC) market.
The Iranian drone attack on Israel is fueling global fears of a major war. However, the impact on the cryptocurrency market is likely to be short-lived.
The previous statement comes from some analysts such as the CEO of Galaxy Digital, Mike Novogratz, who is convinced that the price of bitcoin will resume its upward trend as soon as the fear of the conflict unleashed in the Middle East passes.
Saylor and Novogratz 's comments are not isolated, rather they have been demonstrated by what happened at other times in the history of cryptocurrencies.
For example, when Russia invaded Ukraine on February 24, 2022, the price of bitcoin was around $39,000. And subsequently, as the conflict escalated, cryptocurrency market prices fell due to uncertainty and risk aversion among investors.
Later, the price of bitcoin rose and on March 1 of that same year it recovered, reaching $44,000. After repeated fluctuations, the price of BTC skyrocketed as the narrative that the digital currency is the only means of preserving value during war reaffirmed .
Another event that showed that chaos can be good for bitcoin was when Hamas attacked Israel on October 7, 2023. At that time the price of BTC was around $28,000, but it fell 6% in the days following that attack. However, on October 25, the price rose to $35,000.
The same thing happened on October 27, immediately after the Israeli invasion of the Gaza Strip, BTC fell again by almost 5%, but continued to rise afterwards.
Ultimately, geopolitical instability impacts the price of bitcoin in the short term .
However, everything begins to change again for Satoshi Nakamoto 's invention when investors move their funds towards assets that they consider safer. Over time, the price rebounds as the perception spreads that bitcoin is a means of protection during war.
The Fear and Greed Index is Bullish
In the current context, when talking about the possibility of World War III breaking out, the sentiment in the bitcoin market is almost incorrigibly bullish and this is reflected by the fear and greed index, which leans towards greed with a average of 72 points.
After the BTC market crash recorded yesterday, market sentiment has only gone from “extreme greed” to “greed” . It is a sign that investors maintain the expectation that bitcoin will continue to increase in price in the future.
The community seems to have matured enough to understand that some factors, such as political uncertainty, can directly impact the price, but not so profoundly as to cause immense pain as a result of large losses.
Collective wisdom is reflected in the call of some holders, who invite you to buy when the cannons are roaring. Faced with a war scenario, many prefer to remain calm and trust in the cyclical nature of the market.
