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Bitcoin tumbled over the weekend after a drone attack by Iran on Israel. Under the influence of tensions in the Middle East and the impending halving, the price fell from $68,000 to around $60,000 on Saturday, with $1.2 billion of long positions liquidated. Despite this sharp correction, MicroStrategy co-founder Michael Saylor expressed a positive outlook, saying, “Chaos is good for Bitcoin.”
Chaos is good for #Bitcoin.
— Michael Saylor⚡️ (@saylor) April 13, 2024
His statement was shared on X after Bitcoin’s weekend downturn eroded more than $1.5 billion from MicroStrategy’s holdings. Yet the company maintains a substantial profit of more than $6 billion.
Saylor’s comments drew mixed reactions within the crypto community. Some criticized his timing due to the ongoing international conflict, while others agreed with his view of Bitcoin as a “hedge against chaos.”
Historical data shows that Bitcoin often faces initial price drops during geopolitical instability, but tends to recover as it is seen as a long-term safe haven.
For example, after the Russia-Ukraine conflict began in February 2022, Bitcoin’s price fell to around $39,000, but within a week fell back to $44,000, according to data from CoinGecko. Similarly, after the Israel-Hamas conflict in October 2023, Bitcoin initially fell by 6%, but rose to $35,000 within a month.
Bank distress last March also reflects this pattern, although Saylor’s comment is not necessarily related to economic chaos.
When Silicon Valley Bank faced bank runs on March 10, 2023, Bitcoin’s price briefly fell below $20,500, but soon recovered and climbed to a nine-month high by the end of March. This recovery was further boosted by BlackRock’s application for a spot Bitcoin ETF.
Despite recent war fears, Bitcoin market sentiment remains bullish. According to Alternatives’ data, the Fear and Greed index currently stands at 74, indicating “greed” – down from “extreme greed” but still reflecting strong investor confidence. This optimism is likely fueled by the impending halving event, which has historically been followed by a price spike for Bitcoin several months later.
Bitcoin reclaimed the $66,000 mark earlier today after Hong Kong officially approved spot Bitcoin and Ethereum ETFs. At the time of writing, Bitcoin is trading at around $62,500, down 2.5% in the last 24 hours, according to CoinGecko’s data.
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