Bitcoin tanks, gold rebounds as Israel vows Iran 'will pay' for attack

Commodities including gold and crude oil rose as the specter of war looms in the Middle East. Still, Bitcoin is moving in the opposite direction, leading to renewed debate over whether it’s a safe-haven asset, News.Az reports citing Cointelegraph.

Gold prices gained 1.4% on the day to reach $2,665 per ounce on Oct. 1, just shy of its all-time high, according to Goldprice.org. Meanwhile, crude oil prices spiked as much as 7% to reach $72 per barrel.

Bonds and the United States dollar also climbed following a major missile strike by Iran targeting sites across Israel late on Oct. 1. Israel’s air defenses shot down most of the 180 incoming missiles, according to reports.

“The escalating conflict in the Middle East has prompted investors to seek security in gold, bolstering its appeal amidst broader market uncertainty,” said Li Xing, financial markets strategist consultant to Exness.

Bitcoin BTCtickers down$61,658.88, often referred to as a safe-haven asset, did the opposite, tanking more than 3% over the past 24 hours.

The asset dropped by almost $4,000, falling from an intraday high of $64,000 on Oct. 1 to bottom out at $60,315 at 20.40 UTC on Oct. 1. It has since recovered marginally to trade at $61,800 at the time of writing.

According to Coinglass, 154,770 traders were liquidated over the past 24 hours with total liquidations of about $521 million.

Israeli Prime Minister Benjamin Netanyahu has since promised retaliation for the attack.

“Iran made a big mistake tonight — and it will pay for it,” he said in a statement.

It was not the first time this scenario has played out. Bitcoin prices plummeted more than 8% on April 13 after Iran launched a drone attack on Israel.

Bitcoin questioned as a safe haven asset

Jeroen Blokland, founder of the Blokland Smart Multi-Asset Fund, was among those who said investors are selling BTC to buy gold, while Adam Cochran quipped about it being a “safe haven.”

Meanwhile, precious metals analyst Jesse Colombo told his 169,000 X followers that Bitcoin and crypto always tank when there are geopolitical fears, unlike precious metals, before adding:

“That confirms my long-held belief that crypto is not a safe haven. It's yet another risk asset just like high-flying tech stocks.”

US tech stocks also tanked on Tuesday, with Apple and Nvidia sinking about 3% and the Nasdaq 100 losing more than 2%.

However, BlackRock CEO Larry Fink once said that BTC could still be an alternative inflation hedge asset, while speaking to Fox Business in July 2023:

News.Az