Bitcoin Surges to New High During Geopolitical Tensions and ETF Growth

Sentiment Status: Positive

As stocks dipped in response to the news, Bitcoin surged, reaffirming its position as a hedge against uncertainty.

Bitcoin reached a new all-time high of $95,000 for the first time. The digital gold's market capitalization now stands at $1.85 trillion, supported by surging institutional interest and new financial products like BlackRock’s iShares Bitcoin Trust ETF (IBIT) options.

On November 19, 2024, BlackRock’s iShares Bitcoin Trust ETF (IBIT) debuted its options trading, recording $1.9 billion in notional exposure through 354,000 contracts. Bloomberg ETF analyst James Seyffart called the debut “unheard of for day one”. By comparison, ProShares’ Bitcoin Strategy ETF (BITO) achieved $363 million on its first trading day.

Bitcoin's rise coincides with heightened geopolitical tensions between Ukraine and Russia. Recent reports indicate that Russian President Vladimir Putin escalated declarations regarding nuclear weapons in response to U.S. support for Ukraine. During these events, Bitcoin reached $94,068 before consolidating around $92,616.

While stocks initially declined in reaction to the news, Bitcoin moved higher. Shares of Bitcoin proxy MicroStrategy rose nearly 12%, further investor confidence. Historically, Bitcoin had behaved as a “safe haven” during geopolitical crises, similar to its performance during the 2023 regional banking system turmoil.

It was shown that $315 million in leveraged positions, including $195 million in long positions, were liquidated in the past 24 hours. If the momentum continues, traders expect Bitcoin to test the $100,000 mark.

The crypto market now exceeds $3 trillion, with Bitcoin leading the charge. Ethereum, however, remains flat at $3,128. Solana gained 1%, while Dogecoin surged 10%, reflecting market fragmentation.

Analysts suggest that ETFs like IBIT could reduce volatility and improve liquidity, encouraging more participants to enter the market. Ryan Lee, Chief Analyst at Bitget Research, anticipates Bitcoin reaching prices between $118,000 and $150,000 during its current cycle due to institutional adoption.

VanEck's Matt Sigel emphasized Bitcoin's evolving correlations, noting its long-term ties to money supply growth and a negative correlation with the U.S. dollar. This dynamic makes Bitcoin attractive in uncertain macroeconomic conditions.