It's so notable that the price of Bitcoin is always affected whenever there is war among some notable countries in the world and this makes me to wonder why Bitcoin price is always impacted negatively by war. For instance, Bitcoin saw sharp declines during the 12-day Israel-Iran conflict, but prices rebounded after the announcement of a ceasefire.
What's your opinion on this??
When there is war in this notable countries in the world, there are always panic seller that thinks it may be the end for them and that bitcoin may cease to exist and become obsolete. There are other people that think the end of the world is already coming, so keeping this digital assets in a volatile asset will make them lose and suffer in the future, so they panic sell. There are other people that are fond of selling during any form of war because they think that the price will drop as a result of massive sell off and don’t want to be used as exit liquidity from this people, so they also join to sell early.
Bitcoin is a very strong asset that after every negative move in the market, it tends to get itself back and still continue to trend in the positive direction as it should now. No war or other negative sentiments move some people to sell, they remain calm and patient to reap the rewards of their investment only when the target price is reached.
Yeah I too have observed that and this actually makes sense when you consider the huge influence of emotions in the markets. In the case of war or tension in the world, fear comes in and people automatically shift their money to what they perceive as safer. Although Bitcoin was designed to act as an asset against the traditional system, most of them consider it as a risky asset. and then when the market blows, some panic sellers get panicked because they feel they are to be safe. However, as you say, Bitcoin has a track record of coming back better each time. The actual winners tend to be those people who remain level headed and look at things in the long run rather than acting upon every news.