Bitcoin was the first asset to price the Iran war because it was the only liquid market open when the United States and Israel first launched their attack on a Saturday a few weeks ago.
That day it fell 8.5%. Two weeks later, it has outperformed gold, the S&P 500, Asian stocks and the Korean stock market. Only oil and the dollar have fared better, and both are direct beneficiaries of the conflict itself.
Bitcoin’s safe haven status, a notion that was questioned amid the price lull of late last year, appears to be back on investors’ minds. On top of that, it is acting as the fastest buffer in the global markets as the rallies get bigger while the declines get smaller.
The pattern becomes clearer when looking at where Bitcoin found buyers after each sell-off.
On February 28, the day of the initial attacks, it bottomed at $64,000. On March 2, after Iran’s retaliatory missiles hit the Gulf States, the minimum was $66,000. On March 7, after a week of sustained conflict, the minimum was $68,000. After the March 12 tanker attacks, he had $69,400. And after Kharg Island on Saturday, the low was $70,596.
In simpler terms, each liquidation finds buyers at a higher level than the previous one.
The higher lows trend line has been rising by roughly $1,000 to $2,000 per event, compressing the range from below, while $73,000 to $74,000 remains a ceiling that has now rejected bitcoin four times.
That compression has to be resolved eventually. Either the bottom meets the ceiling and bitcoin breaks above $74,000 on the next try, or the pattern breaks and a further rally eventually overwhelms the buying.
staying strong
The most surprising 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 has fallen. Gold has been volatile in both directions. Asian stocks had their worst week since March 2020.
However, all this does not mean that Bitcoin will suddenly become a safe haven, as it is still selling all the headlines. But he recovers faster and faster and each recovery remains at a higher level.
The contrast with what happened 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 plummeted to $77,000, erasing roughly $800 billion in market value from its October peak.
That episode seemed like the kind of event that could shake market confidence for months. Instead, it appears to have cleaned up weaker hands and readjusted positioning, leaving a thinner market that has absorbed all the war headlines since without repeating that kind of forced selling.
Meanwhile, the macro overlay adds context. Trump said Friday night that he saved oil infrastructure on Iran’s oil-producing island of Kharg “for reasons of decency” but would “immediately reconsider” if Iran continued to blockade the Strait of Hormuz. Iran responded that any attack on energy infrastructure would trigger retaliatory attacks on facilities linked to the United States.
That conditional threat is new and, if it materializes, the supply disruption that the IEA has already called the largest in history will worsen dramatically.
But bitcoin’s adaptation to war tells traders something about what this market has become.
It is neither a refuge nor a purely risk asset. It has become a 24/7 liquidity pool that absorbs shocks faster than anything else because it is the only thing that is traded when shocks hit.
