Bitcoin hovers above $34,000 as traders weigh geopolitical ‘escalation tail risk’

Happy Friday!

The US carried out airstrikes against two Syrian facilities with links to Iran, sending global markets in turmoil.

Let’s dive into it.

Markets in turmoil

Global markets swerved after the US struck Iran-linked targets in Syria.

Brent crude oil rallied while gold slipped from a May high as investor jitters amid the events raised “the escalation tail risk somewhat,” said Neil Wilson, chief analyst at Markets.com in London.

Traders dumped riskier assets, sending the Nasdaq lower. Tech stocks were also weighed down by a mixed bag of earnings, raising doubts about the health of the US economy.

US Treasury yields rose before economic data that may influence Federal Reserve interest rate policy. Bitcoin has held steady after ticking higher this week.

The biggest cryptocurrency is heading for a 23% rally this month and has more than doubled this year. It has hovered near a high not seen since May 2022.

”Remember just how hard it is to price geopolitical risk premia – traders are notoriously bad at this,” Wilson said.

On Wednesday, Bitcoin reached almost $35,000, buoyed by investor optimism for “imminent” regulator approval of a BlackRock spot Bitcoin exchange traded fund.

Arthur Hayes, founder of crypto exchange BitMEX, wrote in a blog post earlier this week that Bitcoin will also be helped by geopolitical worries and rising inflation on the back of what he expects will be a rise in global war spending.

Crypto market movers

• Bitcoin fell 0.3% in the last 24 hours and is trading at $34,123.
• Ethereum is down 1.8% over the same period, reaching $1,785.
• Polkadot and Toncoin are down 4.8% and 4.1% respectively.

What we’re reading

• Crypto advocates rally support for Tornado Cash dev Alexey Pertsev as trial looms — DL News
• Inside SBF’s feud with Binance’s Changpeng Zhao: ‘Well played, you won’ — DL News
• ‘Let’s get after Binance and Tether,’ pro-crypto Senator Lummis urges DOJ — DL News