- Bitcoin sunk over the weekend as Middle East tensions flared up.
- The situation has reignited debates on BTC’s safe haven credentials.
- Anthony Pompliano remains confident in BTC’s long-term outlook.
Bitcoin is often touted as a flight to safety and a reliable store of value, particularly during periods of financial and geopolitical turmoil. However, with Bitcoin’s price sinking 12% on Saturday as tensions between Iran and Israel boiled over, critics argued that the leading cryptocurrency has failed as a safe-haven asset.
The market reaction has reignited debates around Bitcoin’s role and resilience in global uncertainty. But Bitcoin bull Anthony Pompliano remained as confident as ever, calling the weekend crash to $64,000 “a dream” scenario for long-term investors.
Bitcoin Weekend Crash Changes Nothing: Pomp
Talking to CNBC about the weekend crash, Pompliano stated that “crashing to $64,000 was a dream just a few years ago.” He reiterated the need for investors to zoom out and consider the huge percentage gains BTC has made in recent years.
Pompliano also addressed comments that Bitcoin “doesn’t work” as a safe haven asset by telling Fox Business that every time there is financial or geopolitical uncertainty, investors sell liquid assets for dollars, inferring that the weekend sell-off was not a unique situation to Bitcoin.
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“If you go back to covid, that's what we saw, people dumped every asset, they wanted dollars,” stated Pompliano.
Further downplaying the significance of the dip, Pompliano mentioned that multiple 15% drops are expected during any bull cycle. However, despite the market fear, Pompliano remained confident that BTC would lead the recovery as global markets picked up.
Despite Pompilano’s faith in BTC, recent weeks have seen gold exhibit strength, even in the face of fears of the outbreak of World War.
Gold Holds Its Own
While fears of a World War stirred following the drone and missile attack on Israel, the weekend timing of the incident posed an interesting dynamic as legacy markets were closed at the time. This shielded legacy markets from the immediate investor reaction in the crypto markets.
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In the lead-up to the incident, gold had hit a new all-time high of $2,430 per ounce on the Friday prior. This prompted significant profit-taking, with gold closing the day at $2,340. When gold markets reopened on Monday, the precious metal closed 1.8% higher, underscoring its continued appeal as a safe-haven asset.
Interestingly, while legacy gold markets were closed over the weekend, the PAXG crypto token, which is backed by physical gold and tracks the spot price, spiked to $3,100.
In contrast, the tech-heavy Nasdaq index slid 1.8% on Monday, highlighting the broad-based risk-off sentiment across financial markets.
On the Flipside
- There is no definitive evidence on whether Bitcoin is risk-on/off or correlated with tech stocks.
- $771 million longs were liquidated across crypto markets on Saturday.
Why This Matters
Pompliano’s insights into Bitcoin’s recent sell-off shed some light on its complex relationship with traditional markets and geopolitical events. Bitcoin’s ability to recover and potentially outperform other assets in the aftermath will be a crucial test for preserving its safe-haven narrative.
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