Forward, March? The initial market movements on Monday seem to indicate that’s the case, at least for crypto.
The price of Bitcoin (BTC) is up more than 5%, jumping from around $65,500 on Sunday afternoon to over $69,000 as of noon ET Monday. Likewise, Ethereum (ETH) was up around 6%, while XRP rose about 3%.
The CoinDesk 20, a crypto market index, is also up around 5%.
The broad increase in crypto values was a reversal from a downslide that cryptocurrency markets had been seeing in the lead-up to the United States and Israel launching attacks on Iran on Saturday.
On Saturday, after news of the attacks broke, Bitcoin values fell to near $63,000. But as of midday Monday, values were up around 9% from that Saturday low point.
At the same time, the broader stock market has been flat. The S&P 500 is actually down around 1.5% over the past month.
Additionally, crypto-related stocks are also up on Monday. For instance, Coinbase Global (Nasdaq: COIN) saw its shares rise around 4%, while stablecoin issuer Circle Internet Group (NYSE: CRCL) was up 13%.
The latter company had already been riding a wave of stock growth that was bolstered by its better-than-expected earnings report last week. All told, Circle stock is up more than 56% over the last five days.
Why is crypto surging?
There may be a few factors that are fueling the early-week crypto bounce-back.
For one, we may be seeing a technical rebound after the Crypto Fear and Greed Index dipped into the “extreme fear” spectrum in recent days. That could be a sign for some investors that the market is oversold and it may be a good time to jump back in and take advantage of relatively low asset prices.
Relatedly, the crypto market has been undergoing a large-scale liquidation event, as many investors have cleared their holdings in recent weeks and months. That, in part, is why crypto values—including for Bitcoin—have fallen so precipitously over the past six months. Bitcoin is down more than 37% since last October, for example.
The attacks on Iran over the weekend may have shaken some investors out of their torpor, serving as a signal that certain markets are ripe for reinvestment.
With conflict in the Middle East risking further geopolitical destabilization, investors may be looking for alternative or “safe haven” assets for their money, assuming the conflict in Iran affects equity markets.
Whether or not Bitcoin qualifies as a safe haven is the topic of much debate, but it’s worth noting that the trajectory of traditional safe-haven assets like gold and silver is also mixed this week: Gold is up, silver is down.
As Bloomberg points out, crypto investors may simply be dismissing what’s happening in Iran, or they may be sending a message that they don’t think it will have a spillover effect into the markets.
For now, it’s impossible to say if today’s market movements will be a brief bump or part of a broader rebound for cryptocurrencies.