Bitcoin was the first asset to price in a war with Iran, as it was the only liquid market open weeks ago when the United States and Israel launched their first attacks on Saturday.
It fell 8.5% on the day. Two weeks later, it was outperforming gold, the S&P 500, Asian stocks and South Korean stocks. Only oil and the dollar fared better, both being direct beneficiaries of the conflict itself.
Bitcoin’s safe-haven status — a concept that was contested during the price downturn late last year — appears to be back on investors’ minds. Best of all, with bigger upgrades and smaller pullbacks, it’s like the fastest shock absorber on the global market.
This pattern becomes clearer when looking at where Bitcoin finds buyers after each sell-off.
Prices bottomed at $64,000 on February 28, the day of the first strike. After Iran’s retaliatory missile attacks on Gulf countries on March 2, the base price was $66,000. After a week of continued conflict, by March 7, the lowest price was $68,000. After the March 12 tanker attack, it held $69,400. After Hag Island on Saturday, the lowest price was $70,596.
Simply put, each sell-off finds buyers at a higher level than the last.
The trend line of higher lows rises around $1,000 to $2,000 each time, compressing the range from below, while $73,000 to $74,000 serves as the upper limit, which has so far rejected Bitcoin four times.
This compression must eventually be resolved. Either the bottom hits the ceiling and Bitcoin breaks through $74,000 on its next attempt, or the pattern is broken and a larger upgrade eventually overwhelms buying.
stick to stick
The most striking part is Bitcoin’s performance relative to other assets during these two weeks.
Since the war began, oil prices have increased by more than 40%, as shown in the chart below. The S&P 500 fell. Gold moves both ways. Asian stocks experienced their worst week since March 2020.
However, all of this does not mean that Bitcoin has suddenly become a safe haven, as it is still on sale in every headline. But each recovery was faster and each recovery was maintained at a higher level.
It’s a stark contrast to what happened earlier this year. In early February, as Bitcoin plummeted to $77,000, a sudden cascade of liquidations wiped out $2.5 billion in leveraged positions over a weekend, wiping out about $800 billion in market value from its October peak.
The incident looks likely to undermine market confidence for months. Instead, it appears to have cleared out the weakest hands and reset positions, leaving a leaner market that absorbed all the war headlines since without repeating this forced sell-off.
Meanwhile, macro overlays add context. Trump said late Friday that he would not destroy oil infrastructure on Iran’s oil-producing Khargah island “for reasons of honour” but would “reconsider immediately” if Iran continued to block the Strait of Hormuz. Iran responded by saying that any strikes on energy infrastructure would trigger retaliatory attacks on facilities linked to the United States.
The conditional threat is new and, if it materializes, would dramatically worsen what the International Energy Agency calls the worst supply disruption in history.
But Bitcoin’s adaptation to the war has given traders a sense of how this market is changing.
It is not a safe haven, nor is it purely a risk asset. It has become a 24/7 liquidity pool that is able to absorb shocks faster than anything else because it is the only thing trading when the shocks come.
