Bitcoin made a comeback after a period of intense geopolitical tension calmed down, which had previously caused significant drops in cryptocurrency prices.
Initially, the digital currency plummeted over 6% to $59,643 on Friday but later stabilized around $64,450 . Other tokens like Ether, Solana, and the beloved Dogecoin among meme enthusiasts also found their footing.
The tension escalated as Israel retaliated against Iran shortly after Tehran’s missile and drone attacks, rattling global markets. However, reports of the safety of nuclear facilities in Isfahan, Iran, provided some relief. This led to a slight reduction in gains for traditional safe-haven assets like bonds, gold, and the dollar, while stocks and US equity futures recovered from earlier lows.
Amidst this Middle East conflict, attention is diverted from the Bitcoin halving event scheduled for later that day, which will reduce the new supply of the cryptocurrency.
Historically, halving events have boosted Bitcoin prices. However, this time, Bitcoin had already hit a record high in mid-March, raising doubts about whether the expected impact of the halving is already factored into the price.
Stefan von Haenisch, head of trading at OSL SG Pte, suggested that ongoing tensions between Israel and Iran could lead to a cautious approach across the cryptocurrency market. However, he believes that it would take a significant drop in prices to reverse the optimism surrounding the halving event.
Strategists from JPMorgan Chase & Co. and Deutsche Bank AG have indicated that investors have already factored in the quadrennial halving event. Additionally, US-based Bitcoin exchange-traded funds (ETFs) have experienced five consecutive days of net outflows leading up to the event.