Even after a 10% weekly decline in trust in the largest cryptocurrency, some traders believe that global politics and the need for an investment hedge could propel a Bitcoin (BTC) increase in the upcoming months.
Since its creation in the aftermath of the 2008 financial crisis, bitcoin has been regarded as a potential hedge against geopolitical developments. Despite Bitcoin’s long-term strong correlation with conventional market assets, some traders maintain that the hedging story is still relevant.
According to Edouard Hindi, chief investment officer at Tyr Capital, “Bitcoin remains a viable doomsday asset in 2024, as its correlation to Gold has recently increased and investors continue to diversify away from traditional financial assets.”
“As global geopolitics worsen and middle-class people continue to find ways to protect their wealth, the ETF is leading this Doomsday rally, and we should expect $120,000 to be hit in the coming months,” Hindi stated.
The weekend saw a collapse of cryptocurrency markets due to heightened tensions between Iran and Israel and profit-taking in anticipation of the April 20 bitcoin reward halving, a technical event that would reduce network rewards by 50%.
Before a little recovering on Monday, major tokens saw a loss of up to 18% over the weekend relative to their peak prices from the previous week. Tuesday morning in Asia, the decline continued as Israel deliberated on how to react to Iran’s firing of over 300 drones and missiles at its land.
In other news, over the past week, inflows into bitcoin exchange-traded funds (ETF) have decreased. According to data, on Monday, only one product—BlackRock’s IBIT—had inflows, while ten other ETFs all witnessed outflows.
Short-term price movements for bitcoin, according to some market watchers, may determine the direction of the larger cryptocurrency market in the upcoming weeks.
April 2024, Cryptoniteuae
