Bitcoin had a promising start to 2019 which spurred on some volume back into cryptocurrencies by the midway point of the previous year. The spike in crypto prices moved with other alternative assets like gold and silver. Precious metals have started hot in 2020 in response to rising geopolitical tensions, so it should come as no surprise that Bitcoin has also built momentum.
There has been considerable debate in recent years over whether Bitcoin is a safe haven that can be compared to gold or silver. The reaction in the aftermath of the assassination of Iranian general Qassem Soleimani last week gives strength to the argument that it belongs in this asset class. All indications point to escalation between the United States and Iran, especially after the latter has vowed retaliation in response to the targeted killing.
The strength of bitcoin may rely on these external factors as we dive into what is already a wild year. There is also the possibility that Iran could bet more on cryptocurrencies to shield their wealth from rising inflation. The Trump administration has not been afraid to wage economic warfare in its spat with Iran, and this may intensify in the coming months and years.
Bitcoin and other cryptos may show positive moves in this environment, but I’m still more partial to precious metals. These time-tested safe havens have also enjoyed a big jump to start the month of January, and they have not faced the regulatory pressure that cryptos have of late
