Digital Gold is RealCryptocurrency research firm Messari recently published a chart depicting the clear relationship between Bitcoin price movements and major geopolitical events in the Middle East so far this year. pump of almost 10% in just a few hours as BTC topped out at a seven-week high of $8,450. Today, it has pulled back to the $8k zone as tensions ease and the specter of war begins to fade. The gold price charts have been remarkably similar with a surge to a new six-year high of $1,600/oz following recent events. Just as BTC pulled back, gold mirrored the move with its own correction today. So far this year gold has climbed 2.7% to current prices whereas Bitcoin has made 11% over the same period.
Is Bitcoin Really a Store of Value?This narrative has never been stronger for BTC and never been so clear to see by comparing charts. However, other research begs to question whether Bitcoin prices are really that closely correlated to geopolitical events. Former Coindesk editor Pete Rizzo dug up some data from Coinmetrics indicating there was a delayed response in the timing which could suggest a ‘spurious connection.’
“Bitcoin did not immediately respond to the publication of the drone strike. The difference in timing suggests a spurious connection … or limitations on the speed of information diffusal.”In all likelihood, it took a while for the news to circulate and be confirmed before traders piled in. Only when Bitcoin broke short-term resistance did the crowds join the fray. This would explain the delay. Either way, the digital gold narrative has strengthened over the past week and is likely to do so as the year progresses, especially if global geopolitical and economic tensions continue to escalate.
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