Will the Iran war fuel Bitcoin’s rally? Six experts weigh in on what’s next for the price

Bitcoin is holding steady.

The top cryptocurrency’s price may have spiked and dived a bit since US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu signed off on joint strikes against Iran over the weekend, but it’s still trading within the $65,000 to $70,000 range traders have come to expect since the start of February.

That’s almost 50% below the all-time high of $126,000, which Bitcoin achieved in October. However, this may change as the conflict continues.

Six experts have shared thoughts on how the war in Iran will affect the price of Bitcoin moving forward.

Arthur Hayes, Maelstrom

The war will shake Bitcoin out of its funk, according to Arthur Hayes, chief investment officer at Maelstrom.

His argument is that the war effort will force the Federal Reserve to pump liquidity into the market to support the US war effort and cut interest rates. Low interest rates usually incentivise investors to bet on riskier assets like Bitcoin.

Decades of data suggest that this is pretty much what always happens during US military conflicts, Hayes says.

Jake Ostroviskis, Wintermute

Iran has responded to the US and Israeli attacks by not only firing off strikes of its own, but it has also de facto closed the Strait of Hormuz.

The closure of the key passage for one-fifth of the world’s oil could have dire consequences for the world economy in general and for the price of Bitcoin in particular. The price of Brent crude oil has already surged to $85 a barrel.

While that’s still below the dreaded $100 price many analysts predicted ahead of the war, it could still cause Bitcoin traders and digital asset treasuries a lot of headaches.

“The oil move matters more for crypto than the geopolitics itself,” Jake Ostroviskis, head of OTC at Wintermute, said in a statement shared with DL News. “If Brent stays above $80 for more than a few sessions, the re-inflation narrative hardens and the March rate cut that was already a long shot becomes impossible.”

To be sure, traders had already pretty much priced in no change to the US interest rate in March, according to the CME Group’s FedWatch Tool. They give it a 2.4% chance of a rate cut in March. Those chances stand at just over 18% and 41% in April and June.

London Crypto Club

The conflict could go two ways: it could be fast and it could be slow, but Bitcoin will be the big winner no matter what happens, according to analysts from the London Crypto Club.

David Brickell and Chris Mills argued in their latest newsletter that a prolonged war would create an “extreme risk-off scenario” where investors will pour into Bitcoin, using the top cryptocurrency as a hedge against economic uncertainty.

If the war is over swiftly, then they expect that to unleash a Bitcoin buying bonanza that will see the asset’s price surge.

Either way, the US central bank will pump money into the financial system to support the war effort, which will support riskier assets like Bitcoin, Brickell and Mills said.

James Butterfill, CoinShares

So far, Bitcoin has shown remarkable resilience, according to James Butterfill, head of research at CoinShares. Instead of skyrocketing or falling hard, it’s pretty much traded evenly.

Yet, this could change if the longer the conflict continues, Butterfill said in emailed comments to DL News.

“If energy-driven inflation delays monetary easing, traditional risk assets could come under pressure,” Butterfill said. “However, if government tensions intensify and confidence in global financial and trade structures, especially around critical trade routes such as the Strait of Hormuz, continues to erode, scarce and non-sovereign assets such as Bitcoin could benefit in the medium term.”

Pratik Kala, Apollo Crypto

Bitcoin surged on the back of the initial strikes to trade just under $70,000. While it has dropped somewhat, it is still up almost 7% over the past seven days.

That, however, may create a risk, according to Pratik Kala, head of research at Apollo Crypto.

He told Bloomberg that the cryptocurrency has pretty much traded between $65,000 and $70,000 since early February. If the price was to jump above that line, it would invite profit-taking. And as traders liquidated their positions, the price would likely drop again.

Eric Johansson is DL News’ managing editor. Got a tip? Email him at [e-mail].