Analysts Assess Impact of Iran Conflict on Bitcoin Price

US and Israel's military action against Iran may boost Bitcoin, say analysts.

The military operation by the US and Israel against Iran is expected to positively influence the price of the leading cryptocurrency. This view was shared by analysts from the London Crypto Club.

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The Middle Eastern conflict, which resulted in the death of Ayatollah Ali Khamenei, could act as a catalyst for Bitcoin’s growth. Experts David Brickell and Chris Mills described the event as a “narrative catalyst” that the market had long awaited.

According to them, the recent lag in digital gold is the result of a typical cyclical correction.

Initially, it was pressured by tightening liquidity in the US, followed by a rotation out of tech stocks amid AI-related fears. This led many to question Bitcoin’s “narratives” and its role as a macro asset. However, the fundamental qualities of the cryptocurrency remain unchanged, the analysts emphasized.

Two Scenarios

The first scenario is a prolonged war. In such a case, experts anticipate an “extreme risk-off” environment, where investors will begin purchasing the leading cryptocurrency as “protection against the collapse of existing economic and political structures.”

Contrary to logic, Bitcoin will be among the beneficiaries alongside gold, Brickell and Mills believe.

The second scenario is a swift resolution of the conflict. If US President Donald Trump announces an agreement, a “peace premium” will emerge in the market, and Bitcoin will rise on a wave of euphoria.

In any case, the Fed will inject more money into the financial system to support military actions, which will spur the cryptocurrency market, the analysts noted.

“Sell-offs of risk assets during wars are usually very short-lived, as conflicts lead to increased debts and deficits, requiring even more liquidity and the activation of the ‘printing press’ to finance the war,” they commented.

Historical Parallels

The founder of BitMEX, Arthur Hayes, shares a similar opinion. He is confident that the Federal Reserve will shift to a more accommodative monetary policy to support US foreign policy initiatives.

The expert referred to years of data: US military campaigns have invariably led to increased federal spending and subsequent Fed rate cuts. This has become a positive catalyst for markets, including the cryptocurrency market.

At the time of writing, Bitcoin is trading around $67,400. Over the past 24 hours, the asset’s price has risen by 2%.

Earlier in March, JAN3 CEO Samson Mow predicted a rise in the leading cryptocurrency due to an overheated gold market.