Earlier than the Iran conflict broke out, Bitcoin spent months buying and selling sideways whereas gold rallied to document ranges.
On the time, gold was seen because the go-to protected haven; inflation considerations remained persistent and geopolitical tensions continued to construct, whereas Bitcoin (BTC) did not dwell as much as that position.
Almost a month after the US and Israel launched the primary strikes on Iran on Feb. 28, that view is being challenged. Bitcoin initially fell to $63,176 on the information of the assaults however has since risen about 12% to $71,012, as of Wednesday.
In the meantime, rising oil costs and inflation fears have weighed on gold, which fell 11% final week, marking its largest weekly loss since 1983.
Nevertheless, Jonatan Randin, a senior market analyst at PrimeXBT, stated Bitcoin continues to commerce like a danger asset relatively than a protected haven. It sells off alongside equities throughout geopolitical shocks.
“It’s range-bound and showing weakness within a broader downtrend. That’s not safe haven behavior,” he stated.
Liquidity is the “dominant” Bitcoin worth driver
In recent times, Bitcoin has reacted to world information occasions, together with geopolitical shocks and social media posts from influential figures comparable to US President Donald Trump. These strikes are usually short-lived.
Matthew Pinnock, co-founder of decentralized finance mission Altura, advised Cointelegraph that world liquidity stays the dominant driver of Bitcoin’s worth, with macro situations outweighing headline-driven volatility.
“BTC is trading as a high-beta liquidity asset, which means tighter financial conditions, such as higher real yields, a strong dollar and weaker [exchange-traded fund] inflows, reduce marginal capital and pressure price,” he stated.
A September 2024 evaluation compiled and written by Sam Callahan of treasury firm OranjeBTC discovered that Bitcoin’s worth had a 0.94 correlation with world liquidity between Could 2013 and July 2024.
Callahan’s evaluation additionally confirmed Bitcoin moved in the identical course as world M2 in 83% of 12-month intervals, increased than gold, which logged 68.1%. The closest directional alignment after Bitcoin was the S&P 500 index, which represents US large-cap equities and is an often-cited benchmark for danger property.
Randin stated newer knowledge mirrored an analogous sample, pointing to world liquidity rising within the third quarter of 2025, across the time when Bitcoin reached a brand new all-time excessive.
The divergence highlights a broader problem with Bitcoin’s protected haven narrative. Whereas it has outperformed gold over sure intervals because the conflict started, its sensitivity to liquidity situations means it reacts extra to monetary tightening than to geopolitical stress itself. That complicates the concept of Bitcoin as “digital gold,” notably in environments the place inflation and charges transfer in tandem.
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Oil shock complicates Bitcoin’s inflation narrative
Close to-term inflation considerations have been shaping market expectations because the battle started, pushed by rising oil costs and provide disruptions following the closure of the Strait of Hormuz, one of the vital delivery routes on this planet.
Randin stated rising inflation considerations tied to geopolitical shocks are likely to work towards Bitcoin within the brief time period, as increased oil costs feed into inflation expectations, cut back the chance of price cuts and preserve actual yields elevated. That chain of occasions tightens monetary situations and suppresses danger urge for food, limiting demand for property like Bitcoin.
In that sense, Bitcoin isn’t reacting to inflation itself, however to the coverage response that follows, stated Randin.
The Iran battle pushed oil costs above $110 whereas the Federal Reserve raised its 2026 private consumption expenditures inflation forecast to 2.7% and signaled a extra cautious easing path.
“Bitcoin could be better understood as a long-term monetary debasement hedge rather than a short-term inflation hedge, and that’s a critical distinction,” Randin stated.
“It responds to the expansion of money supply over multi-year cycles, not to CPI prints. On the timescale of a war-driven oil shock, it still behaves like the risk asset it is.”
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Bitcoin rebounds throughout Iran battle however danger profile stays
Bitcoin’s conduct through the Iran battle nonetheless aligns with a danger asset. Every escalation has triggered selloffs, liquidation cascades and tighter correlation with equities, at the same time as Bitcoin has held up higher than conventional property over sure intervals.
“But it’s important to remember the context. Bitcoin entered this conflict already in a technical bear market, down over 40% from its October highs and well ahead of equities in pricing in deteriorating conditions,” Randin stated.
“So while it has held up relatively well since the strikes began, outperforming the S&P 500, gold and silver over certain windows, it hasn’t given us any meaningful directional move.”
A structural shift would require a transparent break from that sample, and people indicators have but to look.
Onchain knowledge factors to a distinct undercurrent. Continued accumulation, declining change reserves and rising holdings amongst giant wallets counsel positioning is constructing, even when worth motion has not mirrored it.
Nevertheless, that positioning remains to be constrained by macro situations.
“Right now, inflation driven by a hike in oil prices due to geopolitical factors is pushing yields higher and keeping central banks hawkish, which tightens liquidity. That creates a ‘bad inflation’ regime where BTC falls alongside other risk assets,” Pinnock stated.
“The inflation hedge thesis breaks because Bitcoin responds more to monetary expansion than to inflation itself, and currently, conditions are restrictive, not stimulative,” he added.
Till liquidity situations ease and Bitcoin decouples from equities throughout stress occasions, its position as a protected haven stays unproven.
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