The thesis that Bitcoin (CRYPTO: BTC) would keep investors' wealth secured during geopolitical risks was negated after the leading cryptocurrency plunged along with stocks over fears of a full-fledged war in the Middle East.
What happened: The world's largest cryptocurrency slipped below $62,000, down about 3.52%, as news of Iran launching a missile barrage toward Israel spooked markets.
The decline mirrored a slump in the stock market, with blue-chip indexes like the Dow Jones Industrial Average and the S&P 500 closing Tuesday's trading session in the red.
Bitcoin's slump called into question its 'store of value' moniker, which has been frequently championed by proponents seeking to establish equivalency with gold.
On the contrary, spot gold rose more than 1% to $2,666 per ounce following the development, to later retreat below $2,500 as the missile barrage ended.
In fact, Tether Gold (CRYPTO: XauT), a cryptocurrency backed by physical gold, was among the market's biggest gainers in the last 24 hours.
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Precious metals analyst Jesse Colombo called Bitcoin a risk asset like any other "high-flying tech stocks," arguing that it invariably falls during geopolitical fears.
However, cryptocurrency analyst Timothy Peterson rebutted, saying that both Bitcoin and gold protect against debasement, though gold has a 6,000-year head start on Bitcoin.
Bitcoin and crypto always tank when there are geopolitical fears, unlike precious metals.
— Jesse Colombo (@TheBubbleBubble) October 1, 2024
That confirms my long-held belief that crypto is not a safe-haven.
It's yet another risk asset just like high-flying tech stocks. $BTC $GLD pic.twitter.com/SBLgLgdpKB
Why It Matters: The latest developments cast a shadow on the cryptocurrency market's next moves.
In a note to Benzinga, Chris Kline, COO and Co-Founder of BitcoinIRA, stated that war fears would create headwinds for high-risk investments.
"This potent combination of regional conflicts, evolving monetary landscapes, and looming political shifts sets the stage for a period of significant market unpredictability in the weeks ahead," Kline anticipated.
Price Action: At the time of writing, Bitcoin was exchanging hands at $61,680.41, down 3.56% in the last 24 hours, according to data from Benzinga Pro.
Image Via Shutterstock
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