The influence of the conflict in Iran on Bitcoin makes for an interesting case study.
Traditionally, global events such as the COVID-19 pandemic or war in Ukraine would lead to intense market volatility and severe price-drops as investors sell tokens, move capital to known safe havens like fiat currencies and wait for the storm to pass.
Yet this has not happened in the wake of US and Israeli strikes against Iran and counter-offensives that have impacted many parts of the United Arab Emirates.
Bitcoin has weathered the storm. The all-important question is how.
Digital Gold’s Comeback
Bitcoin managed to not only hold the line in terms of its recent consolidation range but even break above it.
At the same time the gold price fell 5% and silver 10%.
This is deeply significant because towards the end of 2025 gold was luring investors away from Bitcoin on a scale never seen before.
Only a few days before Christmas gold was up 70% in dollar terms while the Bitcoin price had fallen 6%.
Headlines like “Bitcoin’s buzz is gone” were splashed around the world.
There was even some speculation that the “OG” of the crypto world was on its way out.
Barely two months later, Bitcoin flipped the script.
Sell-offs De-risk Cryptocurrency
The answer to the question of how Bitcoin performed so well lies in investor behavior prior to the 28 February strikes on Iran.
Bitcoin’s five-month losing streak was the talk of the crypto world.
Long-term holders at one stage were selling off an average of 1.2 million BTC a month.
Bitcoin’s situation was not made any easier by exchange-traded funds linked to the cryptocurrency unloading 90 000 BTC.
Retailers, meanwhile, took flight as they traditionally do when panic sets in.
Ironically, it was this exodus that de-risked Bitcoin.
In a report [https://k33.com/research/articles/the-worst-is-behind-us-now-we-wait]
issued on 3 March, K33 Research head of research Vetle Lunde explained that investors most likely to respond to the tensions in the Middle East were, in fact, the very same who had de-risked Bitcoin.
This enabled Bitcoin to deliver outlier performance relative to other asset classes.
“We believe Bitcoin’s short-term outperformance is partly due to low active institutional positioning, limiting its use as a macro hedge during geopolitical stress,” he wrote.
“We believe the current risk-reward favours accumulation and view BTC as a strong buy in its current range.”
What also worked in Bitcoin’s favour was that gold – the most well-known of safe-haven options – was overbought, creating concern in the market.
This sparked renewed interest in alternative commodities, namely Bitcoin.
Can BTC Keep It Up?
The jury is still out on whether Bitcoin’s rally can carry through to the medium and long term.
Some analysts are adamant that it is nothing more than a “relief rally” since Bitcoin remains inside a bear market.
Yet it also cannot be ignored that the cryptocurrency has withstood the volatility the war has created in the market.
During the pandemic Bitcoin lost around 50% of its value.
That has not happened here.
For eagle-eyed investors who have come to consider geopolitical tensions the new normal, this will not have gone unnoticed.