Analysis: CLARITY Legislation Expectations and Fiat Devaluation Narrative Resonate, BTC Defies Trend and Strengthens Amid Middle East Conflict

Odaily News According to reports, amidst the Middle East conflict impacting global stock markets and commodities, Bitcoin has defied the trend, reaching a one-month high and driving a recovery in the overall crypto market. After falling nearly 50% from its historical peak in October last year, Bitcoin was once in an oversold zone. Following the recent major conflict outbreak, traditional assets experienced significant declines, while BTC's relatively resilient performance has reinforced its temporary "safe-haven narrative." Market analysis suggests this round of gains primarily stems from three factors:

1. The "fiat devaluation" logic has returned. The Middle East conflict intensifies global fiscal pressures, potentially driving expectations for more easing and deficit expansion, strengthening the "fiat devaluation" narrative. Consequently, some funds are being reallocated to digital assets.

2. Expectations for a potential easing of Middle East tensions exist. Although the US has not responded, this news has reinforced market expectations that "the conflict may not spiral out of control long-term," supporting a recovery in risk asset sentiment.

3. The CLARITY Act is nearing passage, aiming to clarify the legal status of stablecoins, which is positive for the crypto market. (CoinDesk)