Bitcoin is about to record major price gains on escalating US-Iran tensions, according to billionaire investor Michael Novogratz.
The former hedge fund manager, who heads Galaxy Investment Partners – a New York-based cryptocurrency investment firm, said the ongoing geopolitical crisis in the Middle East is bullish for Bitcoin and its traditional rival Gold.
The more I analyze this Iranian situation, the more bullish gold and $btc I become.
— Michael Novogratz (@novogratz) January 5, 2020
“Iraq will [be] expelling US troops,” Mr. Novogratz tweeted. “Iran will have more pull in Iraq which is what they always wanted. Saudi isn’t in a position to want conflict. Mideast [is] less stable. Equals more volatility.”
Conflict Coincides with Bitcoin Gains
Mr. Novogratz’ss statement took cues from the recent killing of a top Iranian military leader. On Friday, US President Donald Trump admitted ordering a drone strike to kill Qassem Soleimani, the head of the Iranian Revolutionary Guards’ overseas forces. In retaliation, Iran allegedly orchestrated three bombings near the American naval bases in Iraq.
The Hassan Rouhani government further declared that it is pulling out from the 2015 Nuclear Deal accord. That said, Iran will no longer limit the number of Uranium centrifuges. The move could lead the country to develop and own its first atomic bomb.
Iran is talking very boldly about targeting certain USA assets as revenge for our ridding the world of their terrorist leader who had just killed an American, & badly wounded many others, not to mention all of the people he had killed over his lifetime, including recently….
— Donald J. Trump (@realDonaldTrump) January 4, 2020
As the tit-for-tat threats between the two nations continued, investors started flocking to safe-haven assets like Gold, Palladium, and Oil. Albeit laggingly, bitcoin also registred fresh gains. The cryptocurrency traded above a crucial resistance level of $7,500 on Monday, its highest since December 23.
“Nice to see bitcoin react to global uncertainty,” commented Mr. Novogratz.
Meanwhile, other prominent analysts saw no demand for bitcoin even though the cryptocurrency climbed by up to 10.58 percent since Friday.
Peter Schiff, CEO of Euro Pacific Capital, noted a lack of interest for bitcoin among institutional investors. He said Gold rose after attractive direct capital flow from risk-on markets. On the other hand, bitcoin surged merely because of speculation. Excerpts:
“Heightened geopolitical risk has resulted in both gold and Bitcoin moving higher, but for different reasons. Gold is being bought by investors as a safe haven. Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.”
Another prominent market analyst Alex Kruger also rubbished the correlation between Bitcoin and US-Iran conflict. He repeated Mr. Schiff’s words in saying that hype drove the cryptocurrency prices higher.
Bitcoin as safe haven narrative again being pushed by traditional media outlets following the Iran news. pic.twitter.com/5flJ6zCKjj
— Alex Krüger (@krugermacro) January 3, 2020
“$BTC moved higher almost four hours after all other assets, and before the move somewhere even discussing how bearish Iran news could be, possibly rationalizing the initial move lower,” he tweeted.