Bitcoin was the first asset to price in the Iran war, as it was the only liquid market open when the United States and Israel launched their first attack on a Saturday a few weeks ago.
It fell 8.5% that day. Two weeks later, it outperformed gold, the S&P 500, Asian stocks and the Korean stock market. Only oil and the dollar have done better, and both are direct beneficiaries of the conflict itself.
Bitcoin’s safe-haven status – a notion that was challenged amid the price decline late last year – appears to be back on investors’ minds. On top of that, it acts as the fastest shock absorber in global markets, as escalations become steeper while declines diminish.
The trend becomes clearer when looking at where Bitcoin found buyers after each sell-off.
On February 28, the day of the first strikes, it reached a low of $64,000. On March 2, after Iranian retaliatory missiles struck the Gulf states, the floor was $66,000. On March 7, after a week of sustained conflict, the minimum was $68,000. After the March 12 tanker attacks, he held $69,400. And after Kharg Island on Saturday, the lowest was $70,596.
In simpler terms, each sale finds buyers at a higher level than the last.
The trendline of the highest lows has increased by around $1,000-2,000 per event, compressing the range from below, while $73,000-74,000 is a ceiling that has now rejected bitcoin four times.
This compression must eventually resolve. Either the floor hits the ceiling and Bitcoin rises above $74,000 on the next attempt, or the trend breaks and further escalation ultimately overwhelms buying.
Hold strong
The most striking part is what Bitcoin has done relative to other assets over the same two weeks.
Oil has risen more than 40% since the start of the war, as shown in the chart below. The S&P 500 is falling. Gold has been volatile in both directions. Asian stocks had their worst week since March 2020.
All of this doesn’t mean that Bitcoin is suddenly a safe haven, as it’s still selling across the board. But it recovers faster each time, and each recovery maintains itself at a higher level.
The contrast with the start of this year is striking. In early February, a cascade of sudden liquidations wiped out $2.5 billion in leveraged positions in a single weekend as bitcoin plunged to $77,000, erasing about $800 billion in market value from its October peak.
This episode looked like an event that could shatter market confidence for months. Instead, it appears to have eliminated the weaker hands and redefined its positioning, leaving a smaller market that has absorbed every war title since, without repeating this type of forced selling.
The macro overlay adds context. Trump said Friday evening that he was sparing oil infrastructure on Iran’s oil island of Kharg “for reasons of decency” but would “immediately reconsider” if Iran continued to blockade the Strait of Hormuz. Iran responded that any strike on energy infrastructure would trigger retaliation against U.S.-linked facilities.
This conditional threat is new, and if it materializes, the supply disruption that the IEA has already called the largest in history will worsen significantly.
But Bitcoin’s adaptation to war tells traders what this market has become.
It is not a safe haven or a pure risk asset. It has become a 24/7 liquidity pool that absorbs shocks faster than anything else because it is the only thing that trades when shocks occur.
