Bitcoin Forum

New crisis in the Middle East: Good for bitcoin, bad for the world

Bitcoin and oil prices soared early on Friday morning after US airstrikes killed a top Iranian commander. Could crypto’s correlation to geopolitics be in any more doubt?

Source: Decrypt.co (https://decrypt.co/15859/new-crisis-in-the-middle-east-good-for-bitcoin-bad-for-the-world)

'Could crypto’s correlation to geopolitics be in any more doubt?'

What's that rule about every headline that's a question concluding with a 'no'?

Fun idea. Just the same as Cyprus or Greece, if anything does happen it's an excuse for the same old scam wickers to fire up a new scam wick. Then it's back to business as usual.

Is the tension in Iran proven to be the cause of this small pump? What would the bitcoin news media tell us if bitcoin dumps again below $7000?

Also, how was it good for bitcoin? The price was higher? Do they only care of bitcoin as a speculative investment?

Could be a coincidence, but it's plausible to believe that this small price was at least partially caused by the Iran news - the timing is there.


Are you saying that no one should look at Bitcoin as a speculative investment? Maybe that exchanges should be shut down and everyone should do only p2p trades?

Satoshi wanted Bitcoin users to have full freedom, without anyone telling them what to do with their coins.

There is no correlation between the possible war between the USA and Iran to the price movement of Bitcoin but if Bitcoin investors and traders are thinking that the possible war can be good to Bitcoin then this perception do affect Bitcoin. Rumors can be affecting anything on the market, that is for sure. There are commodities that can be affected by rumors even planned rumors or just lies. So it is possible that this can be the same thing here. Just as what I am expecting, this can be just short-lived.

Only for those who want some reason why the price has changed, but for those who think with their head, it has absolutely nothing to do with the killing of an Iranian general. He was important, but he is just one in dozens killed every day in Iraq.

What is happening right now is something that has been repeated for months, and we just have to look at historical data (https://coinmarketcap.com/currencies/bitcoin/historical-data/).

- Dec 05, 2019 - $7740
- Dec 14, 2019 - $7300
- Dec 18, 2019 - $6540
- Dec 22, 2019 - $7500
- Jan 2, 2020 -   $6900
- Jan 4, 2020 -   $7400

The article compares gold, oil, and Bitcoin.

If you check gold and benchmark crude charts and zoom out, you see the trend started at the beginning of December, and it got more pronounced around Christmas time, It didn't start immediately after US airstrikes. It seems more like a continuation.
Nothing special to notice for Bitcoin, the price is even around the same as December

I checked WTI, Brent and OPEC basket https://oilprice.com/oil-price-charts I believe there are the most popular (?)
Gold here https://www.bullionvault.com/gold-price-chart.do

Conflicts don't necessarily mean that bitcoin and other cryptocurrencies should go up. It's not as if the economy of an affected country would tank almost immediately should conflicts arise and its citizens would start buying bitcoin/cryptocurrencies frantically. The citizens would still cling into something that they fully understand rather than take risks on uncertain situations.

Though there's a high possibility that Iranians would shift towards bitcoin as the conflict ensues, I'm still believing that they have no direct correlation with what's happening in bitcoin's economy currently. I mean, look at the prices of petrol which skyrocketed after the Iranian Quds Forces general was killed? It's obvious that Iranians would stick to their currency and not shift their attention elsewhere knowing that one of their valuable assets is on the move towards good prices. Besides, we've been in a sideways movement for months now that even Trump's impeachment nor the current news in US-Iran conflict haven't made an obvious dent no the pricing.



Meh. Gold has been doing well as of late November 2019, and I don't, in the slightest, believe that its good performance is caused by the airstrike.


Oil prices somewhat skyrocketed after the airstrikes though, but has since normalized a day after the announcement of the general's death. (Thanks for the link on current oil pricing, LeGaulois.)

https://i.imgur.com/Hy3cNxm.png



I don't know why up to now, geopolitical issues are always connected to bitcoin as if they are intertwined and bonded like crazy. It started from Greece's loans, EU instability, up to Brexit and now The US-Iran conflict.
Seriously, people should stop correlating geopolitics and bitcoin just for speculative growth. The next thing we know, different countries are nuking each other and people would still post "Would dropping an atomic bomb to X country be beneficial to bitcoin?"

The pump in bitcoin does not have anything to do with the tensions in Iran but the oil price will increase in countries where they are dependent on Iranian oil and the rise in gold price might also be because of the escalation of tensions in the middle east, i hope there is no war as it will be a disaster if the actions ends up in a full fledged war.

This thing in Bitcoin right now looks purely technical. We touched support again and bounced back up. Some people are pointing to inverse head and shoulders pattern forming which is bullish.

Read some predictions on tradingview and mist traders are short term bullish about this setup, pointing to 8000 dollars as the target.

Most likely nothing is going to happen in Bitcoin because of Iran. If there's a big pump it will come because of the halving not the war.

I am not saying that. However, it appears that many of the people in the cryptospace are very focused only on the price as a measurement for adoption. Did Satoshi want to create a speculative investment to pump?

He wanted the world to use it.

The world can't use it until it's gargantuan and deeply liquid.

Speculation is the quickest way to get the ball rolling if a little alarming and crude at times and only the first step.

Correct observation. In most cases the price is people's only measuring stick when it comes to determining the level of adoption. People couldn't be more further from the truth. Currently the price is lower than its all time high, yet the actual use is much greater, and that also translates into Lightning growing rapidly, which isn't going to be reflected in the price for years.

I was kinda surprised that I found people literally betting satoshis with each other by playing non crypto online games. The losers pay the winner through the Blue Wallet. It's a third party wallet, but one that does provide a decent amount of utility, and as long as the amounts concerned are low, the risk is negligible.

Adoption that can't be measured if the satoshis aren't withdrawn to the main chain but spent directly at Bitrefill for example.

I don't think that short term bitcoin prices have much to do with world events yet, because the correlation is still extremely weak and it's unlikely that a lot of major players in the markets even consider these things when it comes to their decision making.

It's more likely a coincidence.

But over the long run, I do think that a period of volatility in the world could result in people seeking safe havens to park their funds in, and bitcoin is an obvious choice given its decentralized nature without a government or central banks' intervention that could potentially undermine its long term value.

Hate to admit but this is true. No one would have the balls to use something so obscure as bitcoin back in the days when it clearly has little to no monetary value. While IMO our obsession on speculating with bitcoin is a bit over the top, it really helped us get to places wherein we can't, not unless our bitcoins have any value in them or at least recognized as something that can be traded for real goods and money.

Speculation has always been a double-edged sword for cryptocurrencies such as bitcoin. It hastened the process of it getting known in all fronts of the economy yet it kinda slowed down actual development within the community--and even divided a good portion of it along the way. Speculation is not chaotically evil per se, but chaotically good since it still helps us keep the pace albeit paying the price of hurting the community due to some egoistic, self-centered members that only want profits and recognition and not actual innovation.


It was always coincidence and not actually a direct correlation as some of us would religiously believe. Just sift through a couple of major geopolitical issues from 2015 up to now and you'll see that some of them didn't even make a dent on the price even though a lot of seasoned economists believed that these events would make a beating/everything green for bitcoin. Those who still believe that every important event happening around the world would have a direct impact on bitcoin is either blind or reluctant to accept the fact that they are wrong--or both.


Still, volatility is bitcoin's greatest and worst asset in its arsenal. It invites traders to be adventurous and try out their luck into turning everything into profits while it scares away the boomers and faint-hearted people who only want their funds to be safe and appreciate a few percent every year. Gold remains to be the top dog on safe havens, followed by other precious metals and bitcoin on a close third.

The way I see it, we're on a stalemate between adoption and price stability. Adoption comes in when price is up, then again price isn't stable since it's either rising up ridiculously or crashing tremendously due to whatever trend there is in the market currently. And when price is stable, adoption becomes stagnant, and no new money is coming in to the market.

In truth, price is one of the best measures for adoption there is. Increased adoption means increased demand, which has a direct effect on price. It's difficult to imagine a mass adoption case where the price declines, right?

I can't find the the quote now, but Satoshi acknowledged this. He knew that if Bitcoin caught on, they'd become very valuable. It's simple economics, after all. Did he want that? Maybe not, but he knew it was an inevitable byproduct of adoption. And since humans are rationally greedy, speculation about said adoption is also inevitable.


Indeed. If not for the 2013 speculative bubble, I never would have heard of Bitcoin. I don't understand why speculators get so much flack. They are the reason most of us were ever exposed to Bitcoin at all.

Agreed. However not exclusively as a speculative investment for us to hype and pump. My criticism is towards some of the people behind the bitcoin news media who treat speculation as if it is the only function for bitcoin.

But it's hard to argue that they're wrong. This is a moment in time that'll pass but for now it's the prime reason most people are here. Most establishment development around services in recent times has been almost entirely around milking its volatility.

There are people making proper use of its properties but they must be in a very small minority.

I read, you guys argue about whether Bitcoin should be used as a speculative investment or "in a proper way", and this what came to mind. Every valuable object is actually used both ways. Take famous paintings, such as Leonardo da Vinci's, Paul Gauguin's etc., for example. Shouldn't all of them be used "as intended", so that people could look at them and be inspired for doing great things or something? Yet, they are mostly talked about today because some of them cost hundreds of millions USD. Same goes for cars, postage stamps, and even money, coins and paper, if they are collectibles. So, I think there's absolutely nothing wrong with BTC being also used as such.

https://i.imgur.com/F5VWtyg.png
Interchange by Willem de Kooning. Sold for $300 Million in September 2015.

Actually, it seems to be the opposite, these events decrease the doubt that there is a correlation between bitcoin's fiat price and geopolitical turmoil.

Perhaps it should have said, "Could crypto’s correlation to geopolitics be in doubt any longer?"

Earlier this week we already seen fake news about BTC rising 24,000$ in Iran because of what happened but we all know we jave just got misinformed again by crypto news websites. So I got a feeling that if there are no real threats or threata that have already happened I don't see it affecting the price of Bitcoin since  there will be no demand shifts happening when there is no real war that will happen with US and Iran or the other countries involved.

The last time i checked bitcoin was decentralized in nature while crisis in the Middle East is related to politics and i dont see that have to do with bitcoin price. Mind you, we're currently in a region where the crypto market are highly manipulated and it will be good if people dont misunderstand that as the reason behind the dump in price of bitcoin.
With that been said, crisis is not good but bad for us all and i hope two governments settle their dispute.

It can impact the fiat price of bitcoin because smart people in the region will want to protect their assets (if they haven’t already) from what is happening- confiscation, destruction, capital controls, currency controls and the like. More demand means a higher price all else being equal.

It is an industry of scam for rich people. The dealers sell them overpriced paintings to hold as an investment to sell to a greater fool on a higher price.

This industry also has its own media news outlets, their own exchanges, its own community. I hope gentlemand is right about the cryptospace that the speculative investment phase is only temporary.

The idea behind Bitcoin's price being linked to this conflict is that if there will be war, it would damage the US economy and maybe even the global economy, so Bitcoin is a hedge against it. Traditional markets have already reacted to these events with oil and other commodities spiking in price, so people speculate that the same happened with Bitcoin.

It depends on what your definition is of the speculative investment phase being temporary. If we look at other legacy assets, they are mostly used for speculation. If there is no speculation, there is no liquidity. Bitcoin will eventually experience less volatility, but that doesn't mean people will stop treating it as a speculative investment. Nothing wrong with that.

Forex volumes globally easily top $10 trillion a day. If there was no speculative demand these volumes wouldn't be what they are today. People should stop looking at speculation as an obstacle or bad side effect of how new this space is. It's amazing what we see happen within crypto as we have new wealth distribution happening in front of our eyes.

Maybe I should've rephrased that. I think speculation will likely be the prime mover forever but practical usage and savings will shore up what is currently a market filled with nothing else.

Gold's value is little but speculation but its sheer size gives it some solidity to dip into.

@gentlemand. However, is that what bitcoin's triumph should be? To become only a big market similar to gold? I reckon that it appears speculation has become the prime everything for the cryptospace. It is overregulated and overtaxed and coins are not accepted everywhere without conversion to fiat.

I can't notice a real correlation between crypto and geopolitical issue. Bitcoin is politically independent.

totally politically independent
to the extent that if it is banned in a certain country it doesn't affect it at all /sarcasm
there is always an influence , just do not overestimate the impact
the affected countries don't just drop everything they have been doing and start to buy bitcoin , but in Iran , for example , the capital flight increased dramatically
if this  escalates further and the countries start to exchange strikes , this could lead to a conflict that affects more than just two countries or the Middle East
and I agree that what they see as good for bitcoin aka increased price , is not necessarily a good thing at all

Independent? If they are independent from politics why are the hodlers and businessmen are pushing for favorable laws when it comes to crypto? Why are they asking for help when it comes to scams and hacks happening in the industry? Why are ICOs, STOs, and other projects needs to be regulated and permitted in some countries before they can even offer it? They aren't independent whatsoever as Bitcoin and crypto in general won't have the success it wants which is mass adoption if our governments are not being on our favor. So really geopolitical issues can affect the crypto industry so as the other industries as it affects the demand and supply of everything it also affects the psychology behind the investors' minds.

I would much rather say that the tension in the Middle East is the perfect cover for Whales to trigger a pump in the market. If you have the ability to trigger a pump and you want this to go unnoticed, then you need some kind of "trigger" event to explain the sudden shift in the price.

Remember, the Whales only jump start the process, but the event and the ripple affect of the sudden increase or decrease in the price, is the actual driving factor of the new spike or dump in the price.

There are also very little institutional capital invested in Bitcoin at the moment, so most of this is driven by informal investments and people's personal investments.

I don't understand this reasoning. Do they really care, the whales, to stay unnoticed and under the radar? For what? Especially when BTC is pseudo-anonymous, who cares? Many high transactions pop up daily on the blockchain.

Media outlets use everything possible to explain the trigger, from the forecast weather to the latest Lady Gaga underwear. Even when there is no trigger to look for. And of course, the mass has no problem to buy the stories, no matter what trigger is used.
Whales could do the same and pretend to use all kinds of triggers from the forecast weather to the latest Lady Gaga underwear.

If the issue is more than just simply geopolitical issues such as terrible war or economic embargo or over-inflation, there might be an effect of them to Bitcoin's price. But only if these issues are really reaching a full-scale degree. If not, I don't think Bitcoin's price will be significantly affected.

Well, I have heard that Iran is holding a huge amount of BTC and maybe other crypto but I don't guess that they sold BTC when the crisis occured. Otherwise, I think that the crisis of middle east is controlled by U.S. That whole region is really rich with natural resources including Iraq , that's why some of  countries with great economic power want to exploit these resources just to achieve their goals. Furthermore, I guess that the crisis between Iran and U.S will have neither negative nor positive effect on Bitcoin's price. In fact, the whole comparison between this crisis and Bitcoin is completely wrong.