After a tense week filled with skirmishes, India and Pakistan agreed to a ceasefire today at 5 pm local time. The ceasefire announcement is likely to be met with relief in financial markets, which were fearing an escalation of the third major conflict in recent times. Crypto markets are also likely to sustain the bullish momentum amid such favorable macroeconomic factors.
Bitcoin Volatility Amid Growing Tensions
On April 22, five terrorists targeted tourists in the Pahalgam region of Kashmir, killing 25 Indians and one Nepali citizen. Soon after, India took several non-military measures, including the suspension of the Indus Waters Treaty. On May 6, India launched precision missile strikes at nine locations across Pakistan, targeting its ‘terror infrastructure’.
Following the attack, the Bitcoin price sharply dropped below $97,000 as investors feared further escalation. However, the markets rebounded quickly as India continued to stress that its actions were non-escalatory in nature. Further, as the US-China trade tensions eased, Bitcoin rallied to reach $104k during the early hours on Saturday.
Ceasefire to Boost Regional Stability
Over the last four days, both countries continued to exchange fire along the Line of Control and the International Border. Moreover, many civilians and military infrastructure are said to have been impacted on both sides due to the growing number of air and drone strikes. World leaders praised the ceasefire announcement as a welcome step for regional stability.
India’s Foreign Secretary Vikram Misri said on Saturday evening,
The Director General of Military Operations (DGMO) of Pakistan called the DGMO of India at 15.30 hours (3.30 pm) this afternoon. It was agreed between them that both sides would cease all firing and military action on land, in the air, and at sea with effect from 1700 hours (5 pm).”
Trump Hails “Common Sense and Great Intelligence” of Both Countries
The United States and President Trump have reportedly played a crucial role in de-escalation. The President posted on Truth Social:
After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a FULL AND IMMEDIATE CEASEFIRE. Congratulations to both Countries on using Common Sense and Great Intelligence. Thank you for your attention to this matter!
Historically, geopolitical conflicts have gone both ways for the crypto markets: while some investors continue to buy or hold assets like Bitcoin as a safe-haven, some others move to panic selling to de-risk, leading to price volatility. As the de-escalation of conflict reduces uncertainty, analysts predict that Bitcoin could rally past $110k levels soon, backed by strong institutional interest.
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