The US stock market drops sharply due to geopolitical instability caused by the Israel-Iran war, while the price of Bitcoin has increased to reach its $111,970 all-time high.
According to a crypto analyst, during the Iran and Israel conflict, mainly on June 13, the total crypto market cap fell $to $3.24 trillion.
The current Iran-Israel conflict effectively influences the entire global financial market, including cryptocurrency. The US dollar has not shown any usual safe-haven impact during the conflict situation, according to analysts.
According to Rekt Capital, a crypto Analyst, over the past months, Bitcoin has encountered two 2 week downtrends. Since May, the Bitcoin price has fallen $100,000 for the first time.
Anyhow, the ceasefire agreement between Israel and Iran held under US President Donald Trump helps to provide a good uptrend in the US crypto stocks. At the time of publication, the Bitcoin price increased to $107930, reported CoinMarketCap data.
Due to recent geopolitical tensions involving the Iran-Israel conflict, the value of the US dollar has dropped to a level not seen in the past three years.
The US Dollar Index (DXY), which calculates the strength of USD against the main currencies of the world, noted that since February 2022, the US is trading at its low point, sitting at 97.50 at the publication time, reported by TradingView data.
Meanwhile, the price of Bitcoin has rebounded to at least $107K after a period of trading below that level. As a result, the prominence of the US dollar is decreasing day by day, and this indicates a positive trend for Bitcoin.
The Recent Bitcoin Price Surge
The US dollar has rattled, and Bitcoin has experienced fluctuation in its price value due to the Geopolitical instability mainly occurring in the Middle East.
According to the crypto analysts, crypto market volatility increases in connection with the Iran-Israel attack, but the technical setup recommends that the uptrend still sustains.
Even though the geopolitical tension between Israel and Iran is causing short-term price variations in the US crypto stocks, the overall anticipation is that the crypto market will continue to rise in the long term.
Mathew Hyland, a crypto analyst, said that the value of cryptocurrencies is varying more than usual due to the conflict situation, but the overall trend of the crypto market is still upward despite the increased price fluctuation.
The recent macroeconomic environment can be compared with the early 2000s, the falling US dollar tends to lead to capital rotation into emerging markets and commodities, according to Real Vision’s Jamie Coutts.
The emerging market commodities and equities experienced high growth during the US dollar depreciation from 2002 to 2008, Jamie Coutts added.
Cryptocurrency is today’s emerging market, with money moving into the sector because of its great growth capability and energy.
This emerging market of Crypto causes a potential shift in investor sentiment, making Bitcoin more attractive and undermining the fiat currency system.
As the Iran-Israel conflict escalates, investors are increasingly shifting to alternative crypto assets like Bitcoin, which can provide high returns and serve as a hedge against inflation.
