Bitcoin’s plunge — then rebound — following Iran’s attack on Israel was predictable.
Asset management giant BlackRock advised cryptocurrency investors in a nine-page report that geopolitical events tend to have such an effect on markets.
While Bitcoin, the top cryptocurrency with $1.2 trillion market, value has yet to fully recover its losses, BlackRock suggests it’s just a matter of time. Bitcoin is trading at $61,190, down 2.3% in the past day, according to CoinGecko.
Released in September, Larry Fink’s laser-eyed Bitcoin screed issued a tried-and-tried-again pitch that Bitcoin, much like gold, is an excellent hedge for events like those occurring in the Middle East today.
That’s because a chart from that report shows how Bitcoin rallied double digits 60 days after major geopolitical events, including the US airstrike on one of Iran’s military commanders in 2020 and Russia’s invasion of Ukraine in 2022.
For example, 60 days after the airstrike, Bitcoin rose 20%, while gold only rose 6%. The S&P 500 fell 7% during the same period.
Stick it on your wall and come back in 60 days https://t.co/uuIW3pW6Bc pic.twitter.com/ipxifRvtyX
— James Van Straten (@btcjvs) October 1, 2024
That’s also why BlackRock, the $10 trillion investment firm, which manages the industry’s largest spot Bitcoin exchange-traded fund, recommended a “modest allocation” to diversify investor portfolios.
BlackRock’s analysis means that crypto investors must wait until November 30. BlackRock is not alone.
“These medium-term correlations with risk-on assets may reflect current investor sentiment toward cryptocurrencies,” Jacob Joseph, senior research analyst at CCData, told DL News.
“As Bitcoin adoption grows and it is increasingly viewed beyond its speculative nature, it has the potential to evolve into a global monetary alternative or a distinct portfolio diversifier, as noted in BlackRock’s latest report.”
Crypto market movers
- Bitcoin dropped by 2% over the past 24 hours to trade at $61,196.
- Ethereum dropped by 4% to $2,437.
What we are reading:
- OpenSea axed NFTs that behaved like securities for years before SEC scrutiny — DL News
- How North Korea infiltrated the crypto industry — CoinDesk
- EigenLayer’s EIGEN token unlock goes live with $7.2bn FDV — Unchained
- Franklin Templeton’s onchain money market fund launches on Aptos — The Block
- DeFi reduces crypto thefts by a quarter as total hacks top $2bn this year — DL News
Liam Kelly is a DeFi correspondent at DL News. Reach out at liam@dlnews.com.