The US war with Iran has had a significant effect on the world’s economic landscape.  This conflict constrained energy markets worldwide and pushed prices higher, increasing inflationary pressure on all western economies.

When war broke out, the initial reaction of many investors was to reduce their exposure to risky assets. Even though in the past year we have seen bitcoin become more widely respected as an asset, it is still considered high-risk. Many traders opted to move out of bitcoin and other crypto assets for the relative security of gold and other safe havens.

Throughout the conflict, bitcoin prices remained depressed, and as the conflict dragged way, and the economic effects of the closing of the Strait of Hormuz reached all countries in the world.

Now that both Iran and the US have announced the end of hostilities the world takes a collective sigh of relief. Investors brace for the world’s biggest economies to return to a path of growth.

Anticipation of these good times pushes traders back to the crypto market, and back to bitcoin in particular. This should help crypto valuations to continue to move higher.

In the coming days there should be more clarity as to how solid and deep the peace accord is. Right now, it looks as if this is just a first step, further negotiations will be needed to finalize the agreement. It may be that more uncertainty is in the cards, as there is always a give and take in any ongoing negotiation, but the simple fact is that the world’s economies are going back to normal. And as the world returns to business as usual the markets should also come back to the dynamics observed before the war.

For the time being the effect has been that big investors have gone on the offensive, buying up the bitcoin in the market in preparation for higher future prices.

This article was intended for entertainment purposes only, and does not constitute financial advice.