JPMorgan says the Iran war has produced a strange market split: bitcoin shows the need for a safe haven while gold and silver, the traditional geopolitical hedges, have weakened due to the pressure of outflows, profit taking and currency losses.
In a report of March 26, Nikolaos Panigirtzoglou and his team said that bitcoin has been doing better than precious metals since the conflict escalated. Gold is down about 15% this month, according to the bank, while gold ETFs recorded nearly $11 billion in outflows in the first three weeks of March. Silver has also come under pressure, with JPMorgan saying ETF holdings built up since last summer have now not lost, even bitcoin The money continued to send all the money at the same distance.
Bitcoin Shows Need for Security
That difference is not just a matter of price. JPMorgan says it is also reflecting on trends and the market. Gold and silver became crowded businesses after this pushed for gold around $5,500 an ounce and silver around $120 earlier this year.
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As rates rose, the dollar strengthened and investors moved to risk, those positions began to disappear. The CME outlook shows gold and silver’s biggest decline since January, while bitcoin futures have been relatively stable in recent weeks.
The bank’s explanation is much more than a “bitcoin instead of gold” story. Bitcoin initially traded with other dangerous goods when the war broke out, briefly falling into the low-$60,000 range before settling back in the $60,000 to $70,000 range. JPMorgan’s point is that bitcoin has not acted like a classic bed in the first shock period, but it recovered as the water receded, while gold and silver continued to lose support.
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JPMorgan also built it relative endurance for crypto work in stressful environments. “Gold’s economic collapse has caused its market to fall below bitcoin for the time being,” the bank wrote.
In another summary of the same report, JPMorgan said, “The increase in crypto activity in Iran demonstrates the role of cryptocurrencies as a safe haven in countries facing economic and financial instability and global stress.” The bank cited data from Chainalysis showing an increase in Iranian crypto use after the outbreak of war, including transfers from domestic killings in self-control wallets and international platforms.
This combination of unbridled stability, self-control and around-the-clock trading lies at the heart of the bank’s debate. Bitcoin’s strong signals, which fell into oversold territory, are now returning to neutral territory, JPMorgan said, suggesting that selling is easing.
The excesses of gold and silver, in contrast, rose from high to low as the depletion deepened. The bank’s liquidity work points to the same: the gold market width has now fallen below bitcoin, while the thin silver depth has caused its decrease in violence.
At press time, BTC traded at $68,597.
Graphic design by DALL.E, chart from TradingView.com
