War in the Middle East slows bitcoin uptober

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By TP

Many investors take advantage of the fact that bitcoin is «on sale» to increase their positions. In the long term, bitcoin has reasons to continue rising. Once again, the Middle East captures the focus of world attention. Last night and early today, Saturday, October 26, the State of Israel attacked military sites in Iranian territory. According to the information published by the press (since there are no official reports so far), two soldiers from that country lost their lives. There were no reports of major damage to oil or nuclear facilities (an issue that causes great concern due to the consequences it could have on the global economy). There have been no promises from Iran of an immediate response. Apparently he is following a communication strategy of downplaying what happened. The hypothesis that Iran is preparing a surprise counterattack without prior warning is not ruled out. This growing tension in the Middle East has had an impact on the price of bitcoin (BTC) which, days ago, threatened to resume the upward trend. At the moment, the 'uptober' (bullish October) that many expected is being slowed both by this event, which makes investors go into caution mode, and by the rumors that Tether (issuer of the USDT stablecoin) would be being criminally investigated by the United States Justice. The following chart, provided by TradingView, shows the bitcoin price since october 1 as of this publication:

Bitcoin (BTC) price since October 1, 2024. Source: TradingView.

When war conflicts break out in areas of high geopolitical relevance, such as the Middle East, investors tend to opt for caution. The main reason is that these events increase global uncertainty, leading many to take refuge in traditionally safe assets, such as gold, the US dollar or Treasury bonds. Although bitcoin is often called “digital gold” by enthusiasts, the majority of the market still perceives it as a risk asset, whose price can experience strong volatility in high-stress situations. Therefore, faced with the fear of an escalation that unleashes unpredictable economic consequences, many choose to get rid of their BTC and seek stability in traditional shelters. The strategic importance of the Middle East also plays a fundamental role. This region is one of the largest oil producers in the world, and any threat to energy infrastructure can cause strong movements in the markets.

Regions that can be considered «Middle East». Source: Wikipedia. In conflict situations, The possibility that crude oil prices will skyrocket is not mere speculation; It is a reality that impacts the global costs of transportation, manufacturing and even basic products. With the cost of living in general rising, investors are expected to move away from assets considered risky and hold onto cash or safe-haven assets. However, not everyone gives in to fear. There is a segment of bitcoin enthusiasts who see these price drops as a golden opportunity. For example, as BitcoinDynamic has reported, the total number of bitcoin whales points to its maximum in 3 years. Any entity that owns more than 1,000 BTC is called a “whale.” For these long-term-minded investors, These decreases represent «offers» in the marketsince they trust that BTC will appreciate. Amid the uncertainty, their focus remains on bitcoin's disruptive potential as an alternative to traditional financial systems and, eventually, as a safe haven that will compete with gold.

The 'uptober' is postponed until November

It is very likely that the price of bitcoin remains at a lateralization status until early Novemberwithout a defined upward or downward trend. In the short term, the market appears to be waiting for an event that will give it clear direction, and that event could be nothing less than presidential elections in the United States on November 5.

With the world's leading financial power choosing its next leader, investors are in standby mode, trying to anticipate how the new president's policies could impact not only bitcoin, but the entire global financial system. The electoral contest is shaping up to be a polarizing election, with two candidates who represent very different economic visions: Donald Trump and Kamala Harris.

Trump, known for his favorable stance towards financial deregulation and his sympathy with the cryptocurrency industry (and particularly Bitcoin mining), could generate a positive reaction in the price of bitcoin if he is re-elected. On the other hand, if Kamala Harris wins, the scenario could be very different. Although he has also expressed an open attitude towards the cryptocurrency industry, his approach is expected to be more geared towards stricter regulation and broader oversight of the sector. Keep in mind that Harris is the current vice president of the United States, so her government would be a continuation of Joe Biden's current administration. This could generate an initial reaction of uncertainty in the markets, as any hint of more restrictive regulations on bitcoin and other crypto assets could spook investors, at least in the short term. However, in the long term, bitcoin has its own reasons to shine beyond who the president of the United States is. Analysts at Bernstein, for example, are convinced that BTC will reach $200,000 next year and $1 million in 2033. If their prediction is correct, those who buy bitcoin now, at relatively low prices, would be doing a good deal.


Clarification: This article is written for informational purposes. It does not constitute financial advice or investment recommendation.