Is Bitcoin a Geopolitical Hedge?

Yesterday, much of the world held their breath as videos emerged of bombs landing in Israel.

Within minutes of the news, stocks fell, oil rose, and the price of BTC dropped 4.5%.

Commentators were quick to point at the price chart and exclaim: “bitcoin falls on missile attack!!” and that, therefore, the asset is NOT a “geopolitical hedge.”

However, five minutes of research shows that this reaction is typical for bitcoin. In fact, it may just actually be a good thing.

As shown in the chart from BlackRock below, during times of geopolitical uncertainty, the price of bitcoin may be muted or even drop in the short term…

But in the longer term, it will regain its previous price and rally significantly.

What’s this mean for you? It means to stop listening to the talking heads. It means stop looking at hourly price movements as a gauge of your portfolio.

However, it is also worth noting that bitcoin is still a volatile asset.

And while, yes, the volatility continues to decrease…

The drawdowns can still be gut-wrenching…

So find your happy spot where risks, like we saw yesterday, don’t cause you to puke.

And hold on for the ride.

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China’s Making Moves

Two recent developments in China may signal bullish momentum for bitcoin and the broader crypto market. Let’s take a closer look:

Why It Matters:

PBoC brrr effect: Similar to how US stimulus measures led to a surge in BTC prices by increasing liquidity, China's actions could have a comparable impact on risk assets. The news partially explains why we saw BTC prices get a boost over the weekend.
Signaling for a race: The call for re-examining crypto policies suggests a possible shift in China's strict stance on digital currencies. This could open some new doors for greater adoption in the world's second-largest economy.

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