Bitcoin was the first asset to price the Iran war because it was the only liquid market open when the US and Israel first launched their attack on a Saturday a few weeks ago.
It fell 8.5% that day. Two weeks later, it has 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 — an idea that was challenged amid the tail end of last year’s price decline — appears to be back on investors’ minds. On top of that, it acts as the fastest shock absorber in global markets as escalations get bigger while write-downs get smaller.
The pattern becomes clearer when you look at where bitcoin found buyers after each sale.
On February 28, the day of the first strikes, it bottomed out at $64,000. On March 2, after Iran’s retaliatory missiles hit the Gulf states, the floor was $66,000. On March 7, after a week of sustained conflict, the low was $68,000. After the March 12 tanker attacks, it 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 trend line for higher lows has risen by about $1,000-$2,000 per event, compressing the range from below, while $73,000-$74,000 holds as a ceiling that has now rejected bitcoin four times.
That compression needs to be resolved eventually. Either the floor catches the ceiling and bitcoin breaks above $74,000 on the next attempt, or the pattern breaks and a major escalation finally overwhelms the buying.
Stays 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 war began, as the chart below shows. The S&P 500 is down. Gold has been volatile in both directions. Asian stocks had their worst week since March 2020.
However, all this does not mean that bitcoin is suddenly a safe haven, as it is still selling on every headline. But it recovers faster each time, and each recovery lasts at a higher level.
The contrast to earlier this year is stark. In early February, a sudden cascade of 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 peak in October.
That episode looked like the kind of event that could shatter market confidence for months. Instead, it appears to have removed the weakest hands and reset positioning, leaving a leaner market that has absorbed every headline war since without repeating that kind of forced selling.
The macro overlay adds context in the meantime. Trump said late Friday that he was sparing oil infrastructure on Iran’s oil-producing Kharg Island “for reasons of decency” but would “immediately consider” if Iran continued to block the Strait of Hormuz. Iran responded that any attack on energy infrastructure would trigger retaliatory strikes on US-linked facilities.
The contingent threat is new, and if it materializes, the supply disruption that the IEA has already called the largest in history will get dramatically worse.
But bitcoin’s adaptation to the war tells traders something about what this market has become.
It is not a haven and not exclusively a risk asset. It has become a 24/7 pool of liquidity that absorbs shocks faster than anything else because it is the only thing that trades when the shocks come.
