Bitcoin in the Midst of War: Looking Back at Past Geopolitical Conflicts, Which Stage is the Crypto Market in Now?

Author｜jk

On February 28, 2026, the United States and Israel jointly launched a military strike against Iran. When the news broke, major global financial markets were already closed, leaving the 暗号 market alone to bear undue pressure and a divergence from safe-haven expectations. Bitcoin plummeted nearly 6% within 45 minutes, dropping sharply from around $70,000 touched the previous week to a recent low of $63,038. This triggered approximately $515 million in long position liquidations, erasing over $128 billion from the total crypto market capitalization. The Crypto Fear & Greed Index immediately fell into the “Extreme Fear” zone.

Hayden Hughes, Managing Partner at トークンize Capital, commented on the day of the strike: “Bitcoin is the only large, liquid asset that trades 24/7, so it absorbed all the selling pressure that would have otherwise been distributed across stocks, bonds, and commodities. True price discovery will only happen when US stock markets and Bitcoin ETFs reopen on Monday.”

For long-time participants in the crypto market, this scene of geopolitical conflict is not unfamiliar.

Over the past four years, the crypto market has undergone three significant geopolitical stress tests, each with different outcomes. This article by Odaily will review Bitcoin’s price movements during three geopolitical events—the Russia-Ukraine conflict, the Israel-Gaza war, and the India-Pakistan conflict. By combining the market performance of this US-Israel-Iran war with analyst predictions, we will attempt to outline the evolving complex relationship between war and the crypto market.

The Russia-Ukraine War (2022)

On February 24, 2022, Russia launched a full-scale invasion of Ukraine. Bitcoin plunged approximately 8% within hours, dropping from around $37,000 to $34,413. The total crypto market cap evaporated about $160 billion in 24 hours. Stock markets also plummeted as investors fled risk assets.

However, just four days later, a dramatic reversal occurred. Bitcoin staged a single-day rebound of over 14%, marking its largest one-day gain in over a year. Within a month, the price was about 27% higher than pre-invasion levels, briefly touching $47,000.

This rebound was influenced by the war, showing a very clear trend of rising Bitcoin demand. Analysts partly attributed this surge to Russians attempting to use crypto assets to circumvent sanctions, and demand from citizens in both Russia and Ukraine to move assets into cryptocurrency as their domestic banking systems were impacted. During that brief window, Bitcoin indeed exhibited traits of an “anti-establishment currency”: in an extreme environment where sovereign currencies and traditional banks both failed, people flocked to Bitcoin as a more stable asset for storing value.

But this attribute did not last. In the following months, the Federal Reserve aggressively raised interest rates, and the macro environment sharply reversed. From the collapse of Terra to the implosion of FTX, Bitcoin eventually fell to $16,000. The geopolitical premium sparked by the Russia-Ukraine war was submerged by a larger cyclical bear market. Three months after the war began (late May 2022), Bitcoin was trading around $29,000, representing a net decline of about 20% from pre-war levels.

The Israel-Gaza Geopolitical Conflict (2023)

On October 7, 2023, Hamas launched a surprise attack on Israel, triggering the ongoing Gaza conflict. This time, the crypto market was almost unfazed.

Bitcoin fell only 0.3% on the day the war began, closing around $27,844, showing surprising indifference in the face of a regional war that has caused tens of thousands of casualties. On the fourth day after the war started, Bitcoin fell below $27,000, hitting a new low since September. Traders generally attributed this to the negative impact of the Middle East conflict on investor sentiment. But this was the full extent of the geopolitical conflict’s impact on the market, which then completely dissipated.

Fifty days after the war began, Bitcoin’s performance was already far above its initial price at the start of the conflict. The war narrative was quickly overshadowed by crypto-native narratives like ETF approval expectations and the halving cycle. In the following three months, Bitcoin surged from below $27,000 to a range between $44,000 and $49,000, primarily driven by the historic approval of US spot Bitcoin ETFs by the SEC in January 2024. The Gaza conflict has continued for over two years since, during which Bitcoin once reached an all-time high of $126,173. In other words, as institutional investors and ETF funds entered the market on a large scale, Bitcoin’s price logic has increasingly been dominated by internal cycles rather than driven by external geopolitical events. Regional wars, no matter how severe, have become difficult to shake an increasingly mature financial market.

The India-Pakistan Conflict (2025)

On May 7, 2025, India launched “Operation Sindhoor,” conducting missile strikes on militant group infrastructure within Pakistan, marking the most intense direct military confrontation between the two nuclear-armed nations in decades.

After the news broke, Bitcoin briefly fell to around $94,671, and Ethereum slid to $1,774, but the decline was extremely short-lived. Four days later, both sides announced a ceasefire. The crypto market rebounded immediately, with Bitcoin recovering to above $103,000. The market then quickly returned to its normal trading rhythm. The presence of this conflict was so weak that afterwards, it was almost impossible to find its corresponding trace on Bitcoin’s price chart.

Iran: Where Are We Now, and Where Are We Headed?

The outbreak of this US-Israel-Iran conflict found Bitcoin at a historically fragile moment.

Bitcoin had already fallen nearly 50% from its all-time high of $126,173 in October 2025, with the entire crypto market under sustained pressure since late October 2025. In February 2026, Bitcoin ETFs recorded approximately $3.8 billion in net outflows for the month, the worst monthly performance since spot ETFs began trading. Year-to-date cumulative net outflows had reached $4.5 billion. Meanwhile, gold ETFs absorbed about $16 billion in net inflows during the same period. The divergence between “digital gold” and real gold has become one of the most prominent macro trades in early 2026.

On the day the war began, US President Trump confirmed that US forces had commenced combat operations against Iran. The total crypto market cap evaporated about $128 billion within 24 hours, triggering over $515 million in forced liquidations.

Entering the second week of March, market sentiment noticeably improved as US Treasury Secretary Scott Bessent announced the Trump administration was taking measures to suppress oil prices. On March 13, Bitcoin rose to around $73,800, approaching a one-month high with a single-day gain of nearly 5%. This marked the first Friday with gains since the Iran war began. On March 16, Bitcoin climbed further to around $73,882, breaking above its 50-day moving average. This was the first such breakthrough in two months, viewed by analysts as a significant turning point signal for the medium-term trend. As of press time, Bitcoin has rebounded over 17% from its low point at the start of the war.

Similar to History, but with More Variables

This price action is highly similar to the “script” of previous conflicts—sharp drop, rebound, digestion. If the script were identical, we should now be at the point of beginning to digest.

Looking at the three conflicts over the past four years, one thing is clear: geopolitical events themselves have become increasingly unlikely to leave a lasting mark on Bitcoin’s price. The reason the Russia-Ukraine war caused a substantial impact was not the war itself, but because it triggered Western sanctions on Russia, pushed up global inflation, and coincided with two black swan events. The Gaza and India-Pakistan conflicts further prove that regional military conflicts, no matter how severe, as long as they do not substantially disrupt energy supply and global monetary policy, the crypto market will quickly return to its own narrative after a brief shock.

Whether this US-Israel-Iran conflict constitutes an exception hinges solely on oil prices. The Strait of Hormuz carries about one-fifth of the world’s oil flow. If it were truly blockaded, inflation would be reignited, expectations for Fed rate cuts would be completely dashed, and the macro pressure on Bitcoin as a risk asset would far exceed the initial panic selling at the war’s onset. Conversely, if the conflict remains within its current intensity, oil prices retreat, and negotiations resume, then based on historical experience, the impact of this war on Bitcoin’s price will gradually fade.

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