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Bitcoin is beating gold during the Iran war, but its dependence on liquidity cycles keeps the safe haven narrative in question.At the time, gold was seen as the go-to safe haven; inflation concerns remained persistent and geopolitical tensions continued to build, while Bitcoin (Nearly a month after the US and Israel launched the first strikes on Iran on Feb.
28, that view is being challenged. Bitcoin initially fell to $63,176 on the news of the attacks but has since risen about 12% to $71,012, as of Wednesday.However, Jonatan Randin, a senior market analyst at PrimeXBT, said Bitcoin continues to trade like a risk asset rather than a safe haven. It sells off alongside equities during geopolitical shocks. “It’s range-bound and showing weakness within a broader downtrend. That’s not safe haven behavior,” he said.In recent years, Bitcoin has reacted to global news events, including geopolitical shocks and social media posts from influential figures Matthew Pinnock, co-founder of decentralized finance project Altura, told Cointelegraph that global liquidity remains the dominant driver of Bitcoin’s price, with macro conditions 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 inflows, reduce marginal capital and pressure price,” he said.Callahan’s analysis also showed Bitcoin moved in the same direction as global M2 in 83% of 12-month periods, higher 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 risk assets.Randin said more recent data reflected a similar pattern, pointing to global liquidity rising in the third quarter of 2025, around the time when The divergence highlights a broader issue with Bitcoin’s safe haven narrative. While it has outperformed gold over certain periods since the war began, its sensitivity to liquidity conditions means it reacts more to financial tightening than to geopolitical stress itself. That complicates the idea of Bitcoin as “digital gold,” particularly in environments where inflation and rates move in tandem.Near-term inflation concerns have been shaping market expectations since the conflict began, driven by rising oil prices and supply disruptions following theRandin said rising inflation concerns tied to geopolitical shocks tend to work against Bitcoin in the short term, as higher oil prices feed into inflation expectations,the likelihood of rate cuts and keep real yields elevated. That chain of events tightens financial conditions and suppresses risk appetite, limiting demand for assets like Bitcoin. In that sense, Bitcoin is not reacting to inflation itself, but to the policy response that follows, said Randin. “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 said. “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.”Bitcoin’s behavior during the Iran conflict still aligns with a risk asset. Each escalation has triggered selloffs, liquidation cascades and tighter correlation with equities, even as Bitcoin has held up better than traditional assets over certain periods. “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 said. “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 clear break from that pattern, and those signals have yet to appear.“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 said. “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. Until liquidity conditions ease and Bitcoin decouples from equities during stress events, its role as a safe haven remains unproven.Cointelegraph Features publishes long-form journalism, analysis, and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Research or perspective in this article does not reflect the views of Cointelegraph as a company unless explicitly stated. Content published in Features does not constitute financial, legal, or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence. The selection, commissioning, and publication of Features and Magazine content are not influenced by advertisers, partners, or commercial relationships. This content is produced in accordance with Cointelegraph’s
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