The surprising link between Bitcoin and global politics

The surprising link between Bitcoin and global politics

The global financial markets are currently navigating a turbulent landscape, heavily influenced by escalating geopolitical tensions in the Middle East. On Friday, global risk sentiment took a noticeable hit following Israel’s attack on Iran, a significant escalation in their longstanding standoff over Tehran’s nuclear program.

This military action, combined with economic data and policy developments, has created a complex environment for investors. From stocks and bonds to currencies, commodities, and cryptocurrencies, each asset class is responding in its own way to these unfolding events.

I aim to unpack how these developments are shaping markets and offer my perspective on what it all means for the global economy.

The Israel-Iran conflict: A catalyst for market volatility

The recent Israeli airstrikes near Tehran and Tabriz have thrust the Israel-Iran conflict back into the spotlight, amplifying global uncertainty. This isn’t a new rivalry—tensions have simmered for decades, largely driven by Israel’s concerns over Iran’s nuclear ambitions, which it perceives as an existential threat.

What makes this moment different is the scale and boldness of Israel’s response. Israeli Prime Minister Benjamin Netanyahu called the strikes a “preemptive response” to growing threats, emphasising that operations would persist “for as many days as it takes to remove this threat.” This rhetoric signals a potential for prolonged engagement, raising the spectre of a broader regional conflict that could ensnare allies like the United States or Gulf states.

The implications are profound. A wider conflict could disrupt oil supplies from the Middle East, a critical energy hub, and spike military spending, both of which would ripple through global markets. Investors, understandably jittery, have shifted toward a risk-off stance, favouring safe-haven assets over riskier ones.

The attack came amid stalled diplomatic efforts to curb Iran’s atomic work, further dimming hopes for a peaceful resolution. This escalation marks a pivotal moment—not just for the region but for global stability. The uncertainty it breeds is a textbook trigger for market volatility, and we’re seeing that play out in real time.

US stock markets: Resilience and anticipation

Despite the geopolitical storm brewing, US stock markets managed to close higher on Thursday. The S&P 500 hit its highest level since February 20, climbing 0.38 per cent, while the Dow Jones Industrial Average rose 0.24 per cent and the Nasdaq Composite gained 0.24 per cent. This uptick was driven by softer-than-expected inflation data, which fuelled speculation that the Federal Reserve might lower interest rates if economic growth falters.

Tech giants like Apple, Amazon, and Tesla led the charge, buoyed by optimism about consumer spending and a dovish Fed outlook. It’s a remarkable show of resilience, suggesting that, for a brief moment, economic fundamentals outweighed geopolitical fears.

But that optimism may be short-lived. By Friday, the mood shifted as Asian shares dropped in early trading and US equity index futures hinted at a lower opening. The Israel-Iran conflict is casting a long shadow, and it’s hard to ignore the potential fallout. Defense stocks might see gains if tensions persist, but energy firms could face volatility tied to oil prices, and multinationals with Middle East exposure might struggle.

I see this as a classic case of markets riding a wave of hope—soft inflation and Fed bets—only to crash against the hard reality of geopolitical risk. The anticipated pullback on Friday feels like a correction, not a collapse, but it underscores how fragile investor confidence has become.

Consumer sentiment: A key economic indicator

All eyes are now on Friday’s preliminary June reading of the University of Michigan’s consumer sentiment report, a vital gauge of how Americans feel about their finances and the economy. This survey captures attitudes on personal finances, business conditions, and buying plans—key drivers of economic activity.

A strong reading signals confidence, spurring spending and investment; a weak one hints at caution, potentially slowing growth. With geopolitical tensions flaring and trade policies in flux, this report could either calm or further unsettle markets.

In the current climate, I’d wager we might see a dip in sentiment. The Israel-Iran escalation, coupled with uncertainty over tariffs, could make consumers hesitant. If sentiment falters, it might nudge the Federal Reserve toward a rate cut to bolster the economy, though that depends on how sharply confidence drops.

As someone watching these trends, I think this report will be a litmus test. It’s not just about numbers—it’s about how people perceive their future amid chaos. A significant decline could amplify the risk-off mood, making it a critical piece of the puzzle.

Trade policies: Tariffs and mandates

On the policy front, President Donald Trump’s recent moves are adding another layer of complexity. He’s hinted at imposing higher tariffs on imported cars “in the not-too-distant future,” a step that could reshape the auto industry.

These tariffs would likely raise car prices as foreign manufacturers pass costs to consumers, while straining ties with key exporters like Germany, Japan, and South Korea. Retaliation could follow, escalating trade frictions at an already tense time. Simultaneously, Trump signed a measure blocking California’s electric vehicle (EV) mandate, a blow to the state’s green agenda and a wildcard for the EV market.

These decisions ripple beyond autos. Higher tariffs could dent consumer spending, already under scrutiny via the sentiment report, while the EV mandate block might slow innovation in a sector tied to energy and tech. This as a double-edged sword: Trump’s protectionism might shield some US industries, but it risks isolating the economy globally. The timing—amid Middle East unrest—feels particularly inopportune, amplifying uncertainty when markets crave stability.

Bonds: Flight to safety

In the bond market, US Treasury yields are telling a story of caution. The 2-year yield fell 3 basis points, and the 10-year dropped 5 basis points, as bond prices rose—a clear sign of demand for safety.

When yields dip, it means investors are piling into Treasuries, willing to accept lower returns for the security of government debt. This shift reflects unease over the Israel-Iran conflict and muted inflation gains, which make bonds more appealing than riskier assets.

To me, this is a textbook flight to safety. Geopolitical risks often push investors toward bonds, and the Middle East flare-up fits that pattern perfectly. It’s a signal that, despite Thursday’s stock gains, fear is simmering beneath the surface.

The White House’s trade talks add another twist—uncertain outcomes there could keep bond demand high. For now, Treasuries are a sanctuary, but if tensions ease, we might see yields tick back up.

Currencies: The dollar’s decline

The US Dollar Index slid 0.72 per cent to 97.92, its lowest in three years, reflecting a weaker greenback. This drop ties to expectations of a Fed rate cut—lower rates make the dollar less attractive—and the broader risk-off sentiment.

A cheaper dollar boosts US exports but raises import costs, a dynamic that could stoke inflation if it persists. For global investors, it’s a mixed bag: cheaper US assets might draw interest, but currency fluctuations complicate returns.

Typically, geopolitical crises strengthen the dollar as a safe haven, yet here it’s buckling. That suggests the Fed’s influence and global risk aversion are outweighing traditional patterns. It’s a reminder of how interconnected these factors are—geopolitics, policy, and economics all pulling in different directions.

Commodities: Gold shines, oil slips

Commodities are splitting along predictable lines. Gold surged 1.1 per cent to US$3,387.99 per ounce, cementing its role as a safe-haven star. Middle East tensions are a goldbug’s dream—conflict drives demand for assets that hold value when everything else wavers.

Meanwhile, Brent crude oil dipped 0.59 per cent to US$69.36 per barrel, defying expectations of a spike. Normally, Middle East unrest lifts oil prices due to supply fears, but this drop hints at demand worries—perhaps a slowdown looms if conflict drags on.

Gold’s rally makes sense, but oil’s retreat suggests markets are betting on economic headwinds over supply shocks. It’s a nuanced reaction, and one worth watching if the situation escalates.

Asian shares: Early trading decline

Asian markets kicked off Friday on a sour note, with indices like Japan’s Nikkei 225, China’s Shanghai Composite, and South Korea’s KOSPI sliding. The Middle East’s energy and trade significance hits these economies hard, and the US market’s anticipated dip doesn’t help. It’s a clear echo of the global risk-off vibe—Asia isn’t insulated from this turmoil.

This drop highlights how synchronised global markets have become. What starts in Tehran reverberates in Tokyo, showing the interconnectedness of our financial world.

Cryptocurrencies: Bitcoin’s volatility

Bitcoin took a four per cent hit, falling to US$103,556 after the Israeli strikes, down from a 24-hour high of US$108,500. The broader crypto market followed suit—Ethereum shed 4.5 per cent, XRP lost 3.24 per cent, Solana dropped 4.9 per cent, and Dogecoin slumped 5.9 per cent. This US$3.32 trillion market isn’t immune to risk aversion.

Yet, Bitcoin’s resilience shines through: it’s held above US$100,000 for 30 days, a first even with pullbacks, and inflows into ETFs like iShares Bitcoin Trust (US$12 billion this year) signal growing institutional faith.

I see crypto as a barometer here. Its tumble reflects fear, but its staying power above US$100,000 suggests a maturing asset class. Still, it’s not a haven like gold—volatility remains its hallmark.

Conclusion: Navigating uncertainty

The Israel-Iran conflict has jolted global risk sentiment, pulling markets into a delicate dance of fear and opportunity. Thursday’s stock gains gave way to Friday’s caution, with bonds and gold gaining as stocks and crypto falter. The consumer sentiment report, trade policies, and Fed moves will shape what’s next. 

 

Source: https://e27.co/the-surprising-link-between-bitcoin-and-global-politics-20250613/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

Crypto and global finance: A dance of optimism, politics, and market volatility

Crypto and global finance: A dance of optimism, politics, and market volatility

Key Points:

– US markets show caution with MSCI US index up just 0.01%, while US Treasury yields at 4.48% after a fifth week of decline, influenced by weaker retail sales.
– Trump’s tariff announcement adds complexity with unclear impacts, prompting EU retaliation threats, yet hopes for negotiation to avoid trade war.
– Japan’s economy remains strong, expanding for three quarters, potentially leading to more rate hikes by the Bank of Japan, affecting global investments.
– Currency and commodity markets react; US Dollar down 0.6%, Gold retreats 1.6%, and Brent crude falls 0.4% amid US geopolitical moves in Ukraine.
– HSCEI surges in Asia, up 4.1% to a two-year high, fueled by tech optimism from China’s AI advancements, signaling growth in tech sectors.
– Crypto politics spotlight after Argentina’s President Milei’s crypto endorsement leads to controversy and potential impeachment, highlighting risks in politically linked cryptocurrencies.

 

My observations on February 17, 2025: The global financial scene is currently walking a tightrope between cautious optimism and palpable tension, reflected in the varied outcomes of US stock markets and a clear decline in US. Treasury yields. This situation has developed amidst crucial economic data and political statements that could steer market trends in the near future.

Starting with the US markets, the MSCI US index barely moved, registering just a +0.01 per cent increase, reflecting a tentative market sentiment. Meanwhile, the yield on the 10-year US Treasury note fell by 2 basis points to end the week at 4.48per cent, marking its fifth consecutive weekly decline, a trend not seen since 2021.

This decline occurred amidst a stark miss in US retail sales, which dropped by 0.9 per cent against expectations of a mere 0.1 per cent decrease. This drop to the lowest level in nearly two years suggests that consumers might have preemptively increased their spending in the last quarter of the previous year, possibly in anticipation of price hikes due to looming tariffs.

The political arena added another layer of complexity with President Trump’s announcement regarding new automobile tariffs set for April 2. The lack of specifics on these tariffs has left markets in suspense, with investors and businesses alike trying to forecast the potential impact on both domestic and global trade dynamics. The response from the European Union was swift, with German Chancellor Scholz indicating a readiness to retaliate against any US tariffs, yet expressing a preference for negotiation to avoid escalating into a full-blown trade war.

Shifting focus to Asia, Japan’s economy showed resilience, expanding for the third consecutive quarter, surpassing expectations. This performance has bolstered expectations that the Bank of Japan might continue its trajectory towards further rate hikes, a move that could influence global investment flows given Japan’s significant role in the world economy.

The currency markets reflected this global uncertainty with the US Dollar Index declining by 0.6 per cent, indicating a softening of the dollar against other major currencies. Gold, often seen as a safe-haven asset, experienced a retreat of 1.6 per cent, perhaps suggesting a nuanced investor response to the current economic indicators and geopolitical developments.

In the oil sector, Brent crude saw a 0.4 per cent decline, influenced by anticipated increases in oil supply from Iraq and Russia, with geopolitical manoeuvres by the US aimed at resolving the conflict in Ukraine potentially impacting future oil prices.

In stock markets, the Hang Seng China Enterprises Index (HSCEI) surged by 4.1 per cent, closing above 8,300, hitting a two-year high driven by optimism in tech stocks following China’s advancements in generative AI. This has implications not only for tech sectors but also for investor sentiment towards emerging technologies and their potential to drive economic growth.

However, amidst these economic and market movements, a peculiar narrative involving cryptocurrency and politics has emerged, particularly with politicians inadvertently or directly linked to what are colloquially known as “rugpulls” or scams in the crypto space. The case of Argentina’s President Javier Milei recommending a little-known cryptocurrency, US$LIBRE, which saw a dramatic rise and then a precipitous fall, has sparked controversy. This incident has led to discussions about impeachment by the opposition, highlighting the perilous intersection of political influence and cryptocurrency markets.

Further investigation by crypto analysts like Bubblemaps has revealed potential connections between the creators of US$LIBRE and other meme coins, including one associated with the US First Lady, Melania Trump, under the ticker #MELANIA. This network of seemingly related cryptocurrencies raises questions about the integrity of these ventures, suggesting a coordinated effort to capitalise on political figures’ names for financial gain. The cautionary advice from these events is clear: the crypto market, especially around meme coins or those endorsed by public figures without substantial backing, remains fraught with risks of manipulation and sudden value drops.

Adding to the crypto narrative, the withdrawal of over US$2.45 billion worth of Ethereum from exchanges within a short span indicates a strong accumulation trend among investors, possibly signalling confidence in Ethereum’s long-term value or a strategic move to reduce supply on trading platforms, which could theoretically lead to price increases due to reduced sell pressure.

In conclusion, the current global financial environment is characterised by a mix of economic data interpretation, political announcements, and the volatile yet intriguing world of cryptocurrencies. Investors are navigating through this landscape with caution, balancing between hopeful economic signals from regions like Japan and the potential disruptions from trade policies and crypto market manipulations.

The advice, particularly in the realm of cryptocurrencies linked to political figures, remains to steer clear of investments that lack solid fundamentals or where the potential for manipulation seems high. This complex interplay of economic data, policy announcements, and emerging digital asset trends underscores the need for thorough research and a cautious investment strategy in these uncertain times.

 

Source: https://e27.co/crypto-and-global-finance-a-dance-of-optimism-politics-and-market-volatility-20250217/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j

From Skepticism to Support: The Changing Face of US Crypto Politics

From Skepticism to Support: The Changing Face of US Crypto Politics

The landscape of US politics is undergoing a significant transformation, particularly in its approach toward cryptocurrency. Recent developments suggest a marked shift towards a more pro-crypto stance, with potential implications for the future of digital assets in the American economy. This transformation is evident in the actions and rhetoric of key political figures and the legislative trajectory concerning cryptocurrency regulation.

Historically, the US political environment has been characterized by a cautious, if not skeptical, stance towards cryptocurrency. Regulatory bodies, particularly the Securities and Exchange Commission (SEC), have taken a stringent approach, often viewing digital assets through the lens of traditional securities laws. This has led to a series of regulatory actions aimed at curbing what is perceived as the speculative and risky nature of cryptocurrencies. However, the winds of change seem to be blowing, and the 2024 election cycle may very well be a pivotal moment for the crypto industry.

One of the most striking developments in this regard is the increasing support for crypto-friendly policies among prominent political figures. Former President Donald Trump, who once dismissed Bitcoin and other cryptocurrencies as a “scam,” has seemingly shifted his stance. During a recent fundraising event at his Florida residence, Trump positioned himself as a potential pro-crypto president, garnering significant attention from the cryptocurrency community. His alignment with the crypto sector could signal a broader Republican embrace of digital assets, contrasting sharply with the traditionally more cautious approach of the Democratic Party.

This shift is not limited to rhetoric. Legislative actions also reflect a growing pro-crypto sentiment. On May 22, 2024, the US House of Representatives approved the Financial Innovation and Technology for the 21st Century Act (FIT21). This bill represents the first significant piece of crypto legislation to pass one of the chambers of Congress, marking a potential turning point in how digital assets are regulated. The bill’s passage is particularly noteworthy given the historical reluctance of many Democrats to support crypto legislation, fearing it would legitimize an industry they view with suspicion.

The bipartisan support for FIT21 underscores the changing political dynamics. Notably, former Speaker of the House Nancy Pelosi has expressed support for the bill, indicating a willingness to work across the aisle on crypto-related issues. This is a significant departure from the previously adversarial stance many Democrats held towards cryptocurrencies. Pelosi’s support suggests that even within the Democratic Party, there is a growing recognition of the importance of integrating digital assets into the broader financial system.

The shift towards a more pro-crypto stance is also evident in the actions of the SEC. SEC Chair Gary Gensler has been a vocal critic of the crypto industry, advocating for stringent regulations to protect investors and maintain market integrity. However, there is increasing resistance to this approach within Congress. On May 8, 2024, the US House of Representatives voted in favor of a resolution opposing the SEC’s crypto accounting policy, which had deterred banks from handling crypto customers. This resolution, if adopted, would ease the regulatory burden on banks dealing with cryptocurrencies, potentially fostering greater institutional adoption of digital assets.

President Joe Biden’s stance on cryptocurrency has also evolved. Initially, the Biden administration appeared to support the SEC’s stringent regulatory approach. However, faced with declining approval ratings and a growing recognition of the economic potential of cryptocurrencies, the administration has shown signs of softening its stance. On May 22, the White House indicated that President Biden would not veto the House’s decision to oppose the SEC’s accounting policy, signaling a potential shift towards a more accommodative regulatory environment for cryptocurrencies.

The political calculus surrounding cryptocurrencies is influenced by several factors. First, there is a growing recognition of the economic potential of digital assets. Cryptocurrencies and blockchain technology have the potential to revolutionize various sectors, from finance to supply chain management. By fostering innovation and attracting investment, a pro-crypto stance could spur economic growth and job creation, key priorities for any administration.

Second, the increasing adoption of cryptocurrencies among the American public cannot be ignored. A survey conducted by Pew Research found that nearly 17% of Americans had invested in, traded, or used cryptocurrencies. This growing user base represents a significant voting bloc, particularly among younger voters who are more likely to engage with digital assets. Political leaders who align themselves with the crypto community could gain a strategic advantage in upcoming elections.

Additionally, the geopolitical landscape plays a crucial role. As other countries, particularly China, via Hong Kong, make significant strides in developing their digital currencies and blockchain infrastructure, there is a growing sense of urgency for the US to maintain its technological and economic leadership. Embracing cryptocurrency could be seen as a strategic move to ensure that the US remains at the forefront of financial innovation.

Despite the growing pro-crypto sentiment, there are significant challenges and risks that need to be addressed. The volatility of cryptocurrencies remains a major concern. The dramatic price swings of assets like Bitcoin and Ethereum can lead to substantial financial losses for investors. Regulatory clarity is essential to protect consumers and ensure market stability. This includes establishing clear guidelines on issues such as taxation, anti-money laundering (AML) compliance, and investor protections.

In conclusion, the current state of US politics is increasingly turning pro-crypto, driven by a combination of economic, geopolitical, and electoral considerations. The support from key political figures, coupled with significant legislative developments, indicates a shift towards a more accommodative regulatory environment for digital assets. However, this transformation is not without its challenges. Ensuring regulatory clarity, protecting consumers, and addressing environmental concerns will be crucial in shaping the future of cryptocurrency in the US. As the 2024 election approaches, the stance of political leaders on cryptocurrency will likely play a pivotal role in shaping the industry’s trajectory and its integration into the broader financial system.

 

Source: https://za.investing.com/analysis/from-skepticism-to-support-the-changing-face-of-us-crypto-politics-200602548

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j