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Bitcoin traders welcome geopolitical tensions in 2020 – oil traders remain skeptical

Bitcoin traders welcome geopolitical tensions - oil traders remain skeptical

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Oil traders may not be convinced of a rally due to geopolitical tensions – but the opposite is true for Bitcoin as new capital flows in.

Bitcoin rallies are real

Bitcoin rose to a 7-week high of over $ 8,400 today as news of Iranian retaliation for last week’s U.S. airstrike came to light.

Bitcoin has risen 16% since the start of the recent U.S.-led military action in the Middle East late last week It is not a coincidence.

As usual, Bitcoin has clearly outperformed its competitors . New capital is flowing into the digital asset markets after a long period of consolidation in the low $ 7k range.

Other safe investments like gold have seen similar movements. According to the charts, gold has risen 5% since the end of last week, hitting the highest level since 2013 at $ 1,600 / oz.

Oil traders are not convinced

According to the Wall Street Journal, however, oil traders remain skeptical of geopolitical price increases. Crude oil futures rose up to 5% on Friday after President Trump ordered the attack against Maj. Gen. Qassem Soleimani.

The recent rocket attack has pushed Brent Crude and West Texas Intermediate even higher, but traders fear that profits may be abandoned quickly.

Rebecca Babin, Senior Energy Trader at CIBC Private Wealth Management:

“Many traders sell geopolitical events. If you bought a geopolitical rally last year, you were wrong.”

After the attacks in Saudi Arabia, which wiped out a large part of the Kingdom’s production capacity in September, the price of crude oil rose by 15%. Less than two weeks later, however, the price had returned to what it was before the attacks.

With the crash of the US stock market futures, Stephen Innes, chief strategist for the Asian market at AxiTrader, explains:

“Stock markets reversed the doldrums this morning, largely due to the lack of immediate US retaliation. However, the conflict poses a significant risk if it spreads to a regional conflict and not to an isolated US-Iranian conflict.”

The two assets that appear to be opposing this skeptical trend are Bitcoin and Gold. This rally is currently ongoing, and Bitcoin has gained 17% since the beginning of the year.

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