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Bitcoin plunged over the weekend following an Iranian drone attack on Israel. Prices plummeted from $68,000 to about $60,000 on Saturday, with $1.2 billion in long positions being liquidated due to Middle East tensions and the impact of the upcoming halving. Despite this sharp correction, MicroStrategy co-founder Michael Saylor expressed a positive outlook, saying, “Chaos is good for Bitcoin.”
Why Chaos is Good #Bitcoin.
— Michael Saylor⚡️ (@saylor) April 13, 2024
His statement was shared by X after Bitcoin’s weekend slump ate more than $1.5 billion from MicroStrategy’s holdings. Despite this, the company maintains significant profits of over $6 billion.
Saylor’s comments sparked mixed reactions within the cryptocurrency community. While some criticized his timing due to the ongoing international conflict, others agreed with his view of Bitcoin as a “hedge against chaos.”
Historical data shows that Bitcoin often faces initial price declines due to geopolitical instability, but tends to recover because it is viewed as a long-term haven.
For example, after the Russian-Ukrainian conflict began in February 2022, the price of Bitcoin fell to around $39,000, but bounced back to $44,000 within a week, according to data from CoinGecko. Likewise, following the Israel-Hamas conflict in October 2023, Bitcoin initially fell 6% but rose to $35,000 within a month.
Bank failures in March also reflect this pattern, but Saylor’s comments are not necessarily related to economic turmoil.
When Silicon Valley Bank faced a bank run on March 10, 2023, the price of Bitcoin briefly fell below $20,500, but soon recovered and rose to a nine-month high by the end of March. This recovery was further strengthened by BlackRock filing for a spot Bitcoin ETF.
Despite recent war concerns, Bitcoin market sentiment remains optimistic. According to data from Alternative, the Fear and Greed Index is now at 74, down from “extreme greed” but still indicating “greed,” reflecting strong investor confidence. This optimism is likely to be further strengthened by the upcoming halving event, which historically has been followed by a Bitcoin price peak several months later.
Bitcoin recovered $66,000 this morning after Hong Kong officially approved a spot Bitcoin and Ethereum ETF. As of this writing, Bitcoin is trading at around $62,500, down 2.5% in the last 24 hours, according to CoinGecko data.
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