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Bitcoin’s outlook – the financial implications of Operation Epic Fury
Welcome to the State of Crypto Weekly, an investor-focused newsletter from 21shares that dives into the key trends driving the digital asset landscape.
This week, our focus stays on the market impact of the coordinated US-Israeli campaign. Amid financial consequences that go well beyond the energy market, crypto has held up surprisingly well: as of March 16, Bitcoin is up 13% on the month, and the total crypto market cap is up 12.5%, while the S&P 500 is down 3.7%, bonds are up 10%, gold is down 6.5%, and silver is down 15%.
In Operation Epic Fury’s third week, we are looking into the role of crypto assets during geopolitical shocks and unpacking three potential futures that may unfold for Bitcoin.
Bitcoin’s outlook in the aftermath of Epic Fury
Three scenarios: the pivot, the friction, and the systemic reset
An emerging flight-to-safety asset in a new era of geopolitical volatility, Bitcoin’s immediate future will be shaped by how the conflict unfolds. We map out three potential scenarios ahead:
• Bull case – ‘the pivot’: A swift resolution of the conflict (within one month) would trigger a narrative shift for Bitcoin. This shift would be fueled by a global reassessment of sovereign risk, consequently boosting Bitcoin’s appeal.
• Base case – ‘the friction’: Conflict lasts 3-6 months, during which Bitcoin experiences a period of quiet accumulation.
• Bear case – ‘the systemic reset’: Full escalation spanning over 6 months, with Bitcoin clearly placed as a safe-haven necessity following the initial crash.
Regardless of what unfolds, we believe Bitcoin’s pricing depends less on oil prices themselves and more on how geopolitical shocks affect trust in the monetary system and the inflation outlook. Read the full analysis.
What role do crypto assets play when geopolitical tensions rise?
Hear what our experts have to say
Global Head of Research, Eliezer Ndinga, and Chief Investment Strategist, Adrian Fritz, hosted a webinar last week to delineate prevailing market indicators amid the current geopolitical escalations and analyze the implications of the conflict for crypto assets. Watch here.
Financial Advisor featured our Chief Investment Strategist, Adrian Fritz, discussing the continued confidence of US investors, even following Bitcoin’s recent price drop.
Matthew Mena, our research strategist, was recently quoted by Bloomberg discussing Bitcoin’s rebound to $71,000.
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Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.