World War 3 on the horizon: Bitcoin market cap jumped about $8 billion in just a few hours, BTC volume and price skyrocketed on LocalBitcoins
As AZCoin News reported, the Bitcoin price increased significantly after the news that an American drone airstrikes Iran killed the top general Qassam Suleimani of the Middle East nation. Many commentators have quickly attributed the sudden increase in buying pressure as a way to find a fence in times of heightened political instability.
However, others have argued that it is likely that Bitcoin buyers are only speculating on developments in the Middle East will see a significant number of buyers turn to Bitcoin as a secure store of value.
One thing is for sure, and the event has created a lot of political instability, exacerbating a tense situation between Iran and the United States.
The term “World War 3” and similar has tended to increase its presence on Twitter and Google since the news broke down.
Congresswoman Ayanna Pressley said Trump was “abusing power for political gain, and now he is leading us to the brink of war because he believes it will help him to be re-elected.”
The Occupant was JUST impeached for abuse of power for political gain & now he is leading us to the brink of war because he believes it will help his re-election. We are sick of endless wars. Congress has the sole authority to declare war and we must deescalate. #NoWarWithIran
— Congresswoman Ayanna Pressley (@RepPressley) January 3, 2020
After the news, gold, oil, and the Bitcoin price suddenly soared. In particular, Bitcoin has completely reversed from the previous downtrend (breaking below the critical support of $ 7000 and plunging into the $ 6800 area), increased its total market capitalization to about 7.6 billion dollars in just a few hours.
However, not everyone believes the events are the cause of the global public’s rush to buy Bitcoin in anticipation of significant political instability, or even total war.
Renowned Bitcoin anti-fan Peter Schiff agrees that rising geopolitical risks have caused both gold and Bitcoin to climb higher, but for various reasons. Investors are buying gold as a safe haven. Bitcoin, meanwhile, is being bought by speculators betting that investors will buy it as a safe haven.
Heightened geopolitical risk has resulted in both gold and Bitcoin moving higher, but for different reasons. #Gold is being bought by investors as a safe haven. #Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.
— Peter Schiff (@PeterSchiff) January 3, 2020
Renowned analyst Alex Krüger insists that the sudden buying pressure is likely the result of people expecting uncertainties that will rush into the market abruptly.
Krüger emphasized the timing of various price pumps, arguing that the Bitcoin pump appeared hours after the gold and crude pump. For him, this is clear evidence of another direct cause behind this buying pressure.
It’s happening. People all over talking about bitcoin as a safe haven. Seems they didn’t learn from the failed China narrative. Zoom in intraday. $BTC moved up 3.30 hours after the Iran news, after first dropping 1.5%. Gold and crude instead pumped right away. pic.twitter.com/IMJwj7OWt6
— Alex Krüger (@krugermacro) January 3, 2020
Bitcoin volume and price skyrocketed on LocalBitcoins
Bitcoin remains the top choice in countries with inflation and political instability. The data shows that the volume of BTC transactions on the peer-to-peer market, LocalBitcoins, has increased significantly in these countries.
After Soleimani was killed by the US, the Bitcoin price in Iran jumped to $ 30,000 on LocalBitcoins, a P2P exchange based in Finland. This is almost 400 % higher than Bitcoin’s market value at that time of $ 7,370.
Meanwhile, the trading volume has increased significantly in countries experiencing such economic crises, including Argentina, Chile, and Venezuela. Citizens of these countries have turned to cryptocurrencies, most notably Bitcoin, to tackle high inflation rates, with the simple purpose of supporting themselves.
Jameson Lopp, the respected cryptocurrency proponent, commented on this issue:
2019 Localbitcoins trade volume was generally flat in BTC terms, though countries experiencing high inflation saw increases in fiat terms. https://t.co/qojo3YL82I pic.twitter.com/QeZjoYALkQ
— Jameson Lopp (@lopp) January 1, 2020
While volumes for these specific countries have reached an all-time high, global volumes have stalled over the past few months.
The last days of 2019 saw record Bitcoin transactions in both Venezuela and Argentina, reaching $ 25 million and $ 545,000, respectively. There is a consistent increase in volume in both countries, according to data from Coin Dance. The continuous rise is a strong support sign for the digital currency.
The United States has imposed sanctions on Venezuela, which has been under tremendous economic pressure. One Satoshi (0.00000001 BTC), the smallest unit of Bitcoin, almost the equivalent of a Bolivar of Venezuela, an astonishing comment on the state of the national economy.
The Venezuelan government has a particular interest in Bitcoin, as the state oil company Petroleos de Venezuela SA (PDVSA) is trying to use Bitcoin and the central bank to circumvent these sanctions.
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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