As the stock market cools, the Iranian Supreme Leader, Ayatollah Ali Khamenei has vowed “severe retaliation” to the U.S. drone attack that killed General Qasem Soleimani, the head of the Islamic Revolutionary Guard Corps, in Baghdad on Friday, Jan 3. He was the commander of the Corps Quds Force and one of Iran’s most influential military figures.

Given how fragile the situation is in the Middle East, and specifically, the frosty US relationship with Iran, what would unfold in the coming days could prove consequential and have a major bearing to the trajectory of the financial market.

Will Iran and North Korea Nuclear Deals Collapse?

The Ramification of the Drone Strike

At the wake of Soleimani death, Iran has said it will no longer abide by the binding terms of the 2015 Nuclear Deal that barred Uranium enrichment while in Iraq, the parliament approved a resolution that calls for the expulsion of 5,000 American troops. Meanwhile, Kim Jong Un, the leader of North Korea is also breaking away, not pledging to play by the terms of their nuclear testing. Evidently, the situation on the global scale is precarious. Although the last decade set a firm foundation for some leading investment, going forward, analysts forecast gloom and a retracement of the super gains in the global stock market. Of note, the flaring geopolitical tension and threats of war could prove destabilizing with position holders in the thin holiday markets bearing the brunt.On Jan 3, the global markets may take a clue from development in the US. The share market cooled off, retreating from last year’s high predominantly because the market is worried that political escalation and possibilities of war in the Middle East could slow down economic growth and negatively impact profitability.

However, the US Air Strike on Iran seemed to have pop the over-inflated balloon, a contrarian move that took market participants by surprise. Notably, Soleimani death comes when Trump was readying to sign Phase 1 of a US-China deal.

The drop of U.S. shares was marked by a counter swing that saw Oil Futures, Gold and Bitcoin prices bounce back, starting the year on a strong foot. NASDAQ, S&P and Dow indices all slid. Oil Futures surged on the probable possibility that Iran would target oil flows through the Strait of Hormuz, disrupting supply and therefore fanning demand up.

Gold, Bitcoin, US Treasuries, and select fiat currencies including the Yen also gained because of their safe haven status. Of note, Bitcoin-which has over time evolved from being a medium of exchange, is enjoying the safe haven status and rebounding from 2019 lows.

Bitcoin gains are still suppressed, and at pixel time, BTC, the native currency of the decentralized network, is up 1.5% and trading at $7,519 against the greenback.

In contrast to last year, political developments didn’t drive the market lower.

The trajectory set at the tail end of a rather mixed year, insinuated that there will be a follow through as exuberance spills into 2020. However, from what it appears and stock market participants re-balanced their portfolios, cashing out on Jan 3.

Bitcoin Bottoming Up

As the stock market swings back to risk-averse and traders hold their cards close to their chests, the cryptocurrency market is bottoming up. Before end year’s resurgence, Bitcoin was in a stagnation of some sorts. Unable to breach the liquidation level at $7,500, price action in the last 24 hours, nonetheless, hints of buy pressure.

The digital asset’s rapid price swing further reiterates one of its historical attributes—volatility. Bouncing off from December 2019 lows, BTC price has breached the 20-day Moving Average for the first time in 60 days. Besides, there is an uptick of trading volumes, a development that chartists say points to an accumulation and the laying of foundation that will later support bulls aiming for the next resistance levels at $8,000 and later $9,500.

The best way forward, considering all the uncertainties and fear, is to be anticipatory on price and build up investment positions in the cryptocurrency space. As different idiosyncrasies converge, it is unusual for asset prices to register strong upsides right after the first week of the year.

The possibilities in the cryptocurrency market are therefore a boon for Wolfs Group. The established Estonia-based consulting company is planning for a 5-stage initial exchange offering in 2020. The company specializes in both private and venture capital, and recently acquired Ferpay, a step that also marked their entry in Fintech.

They have signed an agreement with VISA for roll out of multi-currency cards and cryptocurrency to fiat gateway, adding their 5 cents to the blockchain revolution. Already, the BTC, ETH, EUR, and USD gateway have been created. The funds raised in the first stage of their IEO will go towards the growth of Ferpay Ltd, their Fintech wing.