October 1, 2024

Bitcoin Regains $61K in Worst Start to Most Bullish Month as Israel-Iran Tensions Rage On

Global equities and risk assets such as bitcoin took a hit Tuesday as Iran launched missiles on key Israeli locations, with the latter threatening retaliation in the coming days.Tensions in the Middle East pushed down BTC during the first half of Asia trading hours Wednesday.

BTC fell the most in over a month, while gold rose, with the drop reaching 6% at one point and 24-hour losses at 3.5%. That was the worst start for the asset’s historically most bullish month, Presto Research traders wrote in a note Wednesday.

Polymarket bettors are giving a 49% chance that Israel will retaliate against Iran by the end of the week.

“Historically, October has been a strong month for BTC with only two losing years out of the last 11,” Presto said. It pointed out gold’s outperformance in the past 24 hours as a measure of the different maturity levels of both assets.

“Last night’s BTC price action (BTC -4% vs. gold +0.8%) in the aftermath of Iran’s attack in May puzzling, esp. considering BlackRock’s recent pitch for BTC as a risk-off asset similar to gold,” researchers led by Peter Chung wrote. “The reality is that the difference in these two assets’ short-term price actions reflects their different maturity phases.”

The broad-based CoinDesk 20 (CD20) fell 4.7%, its worst drop in recent weeks.

“Gold is a much more mature asset, with a 5,000 year history as a store of value, so there’s not much room left for incremental network effects. BTC, on the other hand, shares the same attributes that make gold a good store of value (better in many cases), but with only 15 15-year history. This means it’s in the early stages of mainstream adoption, and its narrative is still poorly understood,” they added.