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Bitcoin’s use case as a hedge against geopolitical tensions is being questioned after it dropped to $62,000 over the weekend after Iran launched a missile and drone attacks against Israel.

Bitcoin lost 7.5% of its value on Saturday, plunging from over $67K to around $62K in minutes after news of Iran’s attack on Israel.

That prompted Bob Elliott, a former top executive with $124 billion in assets fund manager Bridgewater Associates, to compare its performance to PAX Gold (PAXG), a gold-backed crypto token that rallied to a new all-time high of $2,855 after Iran’s attack.

“Bitcoin may be many things, but it is not a geopolitical hedge,” he said in a post on X. “This weekend was another good empirical test.”

He noted that BTC displayed a similar performance during the Oct. 7 Hamas attack on Israel. While gold tends to rally during such instances, BTC has exhibited a contrasting performance.

“Many make the case that rising geopolitical tensions are a positive for BTC prices,” said Elliott, now co-founder of Unlimited. “The empirical evidence suggests otherwise. If anything, it looks to be getting more negative over time. BTC is not ‘digital gold.’”

Bitcoin Crash Is Due To Retail Activity

Some analysts disagreed with Elliott’s conclusion of Bitcoin’s underperformance during times of geopolitic tension, saying the weekend crash was due to panic by retail and leveraged traders.

One trader noted that crypto was the only risk asset trading over the weekend, and comparing it with other assets was unfair.

PAXG has low liquidity, with only $44 million in daily trading volumes. In contrast, Bitcoin’s 24-hour trading volumes stand at over $27 billion.

Those were among factors that prompted commentators like “Checkmatey,” an on-chain analyst at Glassnode, to criticize comments such as those made by Elliott.

”Folks who posted about the price of an illiquid gold token trading higher today as a dunk on #Bitcoin are an unserious market commentator,” Checkmatey said.

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