The price of bitcoin, the flagship cryptocurrency, has recently hit a new 400-day high as tensions between the United States and Iran flared, as investors are likely hedging against the possibility of an international armed conflict.
According to data from CryptoCompare, bitcoin’s price hit $9,730 earlier today, June 21, 2019, hours after U.S. President Donald Trump reacted to Iran downing a spying drone the nation sent to the Strait of Hormuz – a critical chokepoint for the global oil trade. At about the same time, the price of Gold also surged. Source: CryptoCompare
The cryptocurrency’s price rise was accompanied by a large uptick in 24-hour trading volume, and as usual most altcoins followed suit. The cryptocurrency market has, in the last 24-hour period, added about $10 billion.
The cryptocurrency market’s rise was likely aided by rising tensions between the U.S. and Iran. Recently the Iranian Revolutionary Guard shot down an American drone that it claims flew into Iranian airspace, but that the U.S. claims was over international waters.
Ali Shamkhani, the secretary-general for the Supreme National Security Council, was quoted by a state-run news agency as saying Iran will defend its borders “with all our might,” and after being briefed on the situation Donald Trump claimed the country made a “very big mistake.”
Iran made a very big mistake!— Donald J. Trump (@realDonaldTrump) June 20, 2019
During a press conference, when asked by the media how he’ll react to the drone being downed Trump merely replied “you’ll find out.” Reuters reports the U.S. president warned Iran via Oman an attack was imminent, while the New York Times reports Trump approved military strikes against the country in retaliation, although these were allegedly called off at the last minute.
Bitcoin, being a viable, permissionless cryptocurrency, could be for some the best way to hedge against a conflict, as it allows individuals to send money across borders without having to worry about potential liquidity risks, sanctions, or other restrictions.
Other Factors Behind Bitcoin’s Rally
While tensions between the U.S. and Tehran have likely gotten traders hedging against the possibility of an international conflict, there are other factors influencing the flagship cryptocurrency’s performance.
These could involve bitcoin’s halving event next year, which will see rewards for mining new blocks on the blockchain drop from 12.5 BTC to 6.25 BTC, and Bitcoin’s hashrate hitting a new all-time high above 62246627 TH/s, which means the network itself is now more secure as miners keep betting on its future.
The cryptocurrency may also be rising as Binance is launching a U.S.-only platform and booting users from the country from its main Binance.com exchange. This, analysts claim, could see traders dump altcoins that may not be listed on this new platform for BTC.