- The geopolitical tensions could sway investors toward alternative assets such as Bitcoin (BTC).
- Analysts believe this could launch the digital asset to $120K.
- The bullish outlook comes despite the cryptocurrency losing the $70K mark lately.
Bitcoin as Digital Gold
In the past few years, Bitcoin has started showing a strong correlation with traditional markets. This was further influenced by the introduction of spot Bitcoin exchange-traded funds (ETFs) in the US last January.
As reported earlier, BTC is now exhibiting the same behavior as other ETFs and US stocks since the arrival of spot Bitcoin ETFs in the US. This is due to the fact that a lot of human traders and bots have begun synchronizing their buying and selling patterns with them.
Despite this change in dynamics, some financial analysts still believe Bitcoin has not lost its luster as the “digital gold.” It should be noted that the crypto was conceptualized in the wake of the 2008 financial crisis and was subsequently launched in 2009. Thus, by design, it has always been intended to go out of its way from the traditional mold of the financial market.
A Viable Doomsday Asset
Tyr Capital CIO Edoauard Hindi claimed in his email to Coindesk that Bitcoin is still a viable “doomsday asset” to this day. He added that it presents investors with an avenue to diversify their wealth outside the confines of traditional assets.
Hindi likewise pointed out that the correlation between Bitcoin and gold continues to strengthen. This is supported by the recent data of Longtermtrends, which displays a one-year rolling correlation coefficient of 0.97 for the two. The numbers translate to a very high positive correlation between the world’s oldest hedge and its digital alternative due to the reason that a score of +1 already indicates a perfect positive correlation for the assets in question.
The analyst stated the spot Bitcoin ETFs could be the primary catalyst of the coming Doomsday rally if the hostilities continue around the globe. And if that happens, we should prepare for its launch to $120K in the coming months as the middle class will likely continue hedging their wealth in the most accessible hard asset out there.
It’s not clear, however, if the expert has even factored in the upcoming halving in his assessment. If not, the tighter supply post-halving could provide more leverage to his forecast.
Bitcoin Now
As of this writing at 10:00 AM UTC on Wednesday, Bitcoin remains stuck at $63,300 as it continues to hit a roadblock around a $64,000 resistance. The figures are notably over 8% down on a one-week basis after the Iran-Israel tension last Saturday halted BTC’s momentum toward its halving.
With the hostilities in the Middle East not showing any point of slowing down, it remains to be seen how Bitcoin will move in the next few days as it nears its halving around the evening of April 19 (at UTC standard).