The price of bitcoin has reacted calmly to Israel’s new attack on Gaza.
Israel sees the end of the war close, while Iran sees the beginning of a new war phase.
Financial markets, including bitcoin (BTC), have started today’s day on the rise, after the new geopolitical situation in the Middle East that changes the game landscape.
Israel announced yesterday afternoon the death of Hamas leader Yahya Sinwar in an attack by its troops in the southern Gaza city of Rafah. With this situation, Israeli leaders see possible the end of the war if they free their hostage compatriots.
“The elimination of Sinwar opens the possibility of the immediate release of the hostages and paves the way for a change that will lead to a new reality in Gaza, without Hamas and without Iranian control,” said Israeli Foreign Minister Israel Katz.
«Hamas will no longer govern Gaza. “This is the beginning of the day after Hamas,” exclaimed the Prime Minister of Israel, Benjamin Netanyahu. “The return of the hostages is an opportunity to achieve all our objectives and something that brings the end of the war closer,” he stressed.
However, Khalil al-Hayya, a senior Hamas political official, declared today that the Israeli hostages will not be released until Israel withdraws from Gaza. Additionally, Hezbollah, the Lebanese political-paramilitary group allied with Hamas, said they are entering a new phase in their fight. In this way, the conflict still seems difficult to reach an end.
Despite these geopolitical tensions, The price of bitcoin today exceeded $68,500 (USD), thus achieving maximums not seen in almost three months, precisely since July.
With this movement, bitcoin reinforced the upward trend that it has been showing for more than two months, as shown in the following graph. This leaves it 6% from the historical maximum price it registered in March.
Likewise, the S&P 500 (SPX), an index that compiles the shares of the main 500 companies listed in the United States, opened today’s day higher. This allowed it to reach new historical maximum pricescontinuing with the upward trend that it maintains, driven by the beginning of the cycle of interest rate cuts.
With this behavior, financial markets seem to have welcomed the closer possibility of an end to the war in the Middle East, regardless of the response of Hamas defenders.
Because a war has implications for the global economy, investors tend to shy away from assets that may be at risk. Without going any further, this was reflected in the escalation of war in the Middle East at the beginning of October, which caused the markets to momentarily decline.
Therefore, When the end of a war begins to appear, markets usually react positively around expectations of greater geopolitical and economic stability. In this sense, the development of the conflict in the Middle East is a factor that may continue to impact the prices of financial assets, such as bitcoin.
Bitcoin gives off mixed views from investors
Something to keep in mind, in this area, is that bitcoin gives off mixed views from investors. While some see it as a risk asset due to its high volatility, others They classify it as “digital gold”. The latter has to do with the fact that, like metal, it has a scarce supply and decentralized mining without depending on a particular economy.
Historically, the price of gold has risen in periods of geopolitical and macroeconomic uncertainty, which is why it is seen as a store of value. According to analysts at investment bank JP Morgan, bitcoin can also fulfill this role in the market.
Therefore, even though bitcoin could benefit from an end to geopolitical conflicts, it can also benefit from an opposite scenario only if its narrative as “digital gold” gains strength.
The price of gold reached a new price record today, like the SPXwhich indicates investors’ attempt to take refuge in the uncertain future. However, in the event of greater certainty about the end of the war in the Middle East and macroeconomic improvements, its demand could decrease and risk increase.
With this in mind, for the continuity of prices, it is key how investors continue to develop in the face of advances in the global environment.