Conflict in the Middle East could cause a temporary decline in cryptocurrency markets and reduce the value of risky assets, including Bitcoin. About it reported CoinDesk with links to traders.
On October 10, the market capitalization of cryptocurrencies decreased by 2% to $1.06 trillion by 16:18 Moscow time. After the conflict on the Gaza border escalated, crypto investors began to sell their assets. According to futures traders, liquidation volumes exceeded $100 million per day.
On October 9, the price of Bitcoin decreased by 2.3% to $27,324. By 10:40 Moscow time on October 10, the price had almost recovered and amounted to $27,944. But at 16:38 Moscow time, the value of the cryptocurrency fell again – by 2.2% to $27,350.
The chief operating officer of the BTSE cryptocurrency exchange, Jeff May, noted that the fall in the price of Bitcoin is a temporary phenomenon. In his opinion, the currency will stabilize in the near future.
May added that cryptocurrencies have already shown short-term declines against the backdrop of armed conflicts, but quickly regained their value. According to him, such fluctuations are associated with the tendency among investors to abandon risky assets in favor of gold in crisis situations.
FxPro senior market analyst Alex Kuptsikevich noted that Bitcoin fluctuations in the near future will depend on changes in prices for oil and other energy resources. He noted that rising oil prices motivate investors to sell stocks due to fears of tightening monetary policy. For Bitcoin, this is the most serious risk, as for the entire cryptocurrency market, the expert concluded.
Markets reacted to the escalation of the Middle East conflict by increasing volatility. The hostilities had the greatest impact on the Israeli market: the Tel Aviv stock exchange index collapsed by more than 7%. The shekel to dollar exchange rate fell to its lowest level since 2016, which is why the Central Bank of Israel introduced foreign exchange interventions.
Stock markets reacted by lowering prices, while oil, gold and the dollar, on the contrary, began to rise. Experts interviewed by Vedomosti recommended that investors increase investments in protective assets or the energy sector. In particular, it is now worth paying attention to the shares of the Chinese gold mining company Zijin Mining and the American oil companies ExxonMobil, Chevron and ConocoPhillips, analysts noted.