The current market is in a phase of macro repricing dominated by geopolitics. The escalating situation related to Iran is increasing uncertainties in energy supply, inflation trajectory, and global growth prospects. The market had been trading on expectations of looser policies, but as the risk of conflict spillover rises, the pace of interest rate cuts is being reassessed, with a gradual pricing-in of a more hawkish policy path.
From the current pricing perspective, the market still tends to view this round of shock as a temporary inflation disturbance, with the implicit assumption that the impact on energy and shipping is relatively controllable and will ease within a reasonable timeframe. However, as risks continue to accumulate, the interplay between energy, interest rates, and risk appetite is intensifying, and the macro narrative is shifting from a 'short-term inflation shock' to a 'potential growth shock.' In this process, Bitcoin's performance is beginning to show structural characteristics distinct from traditional assets.
Inflation Shock Dominates Pricing: Energy and Interest Rates Reshape Risk Asset Performance
In the first phase of this shock, the core driver remains the inflationary pressure brought by rising oil prices. Higher Brent crude prices are pushing up inflation expectations and tightening financial conditions, putting pressure on risk assets. In this phase, both stocks and Bitcoin struggle to fully avoid adjustment pressures.
However, compared to traditional risk assets, Bitcoin has a key difference: its price has already experienced a significant decline, leaving relatively limited potential passive selling pressure in the market. This 'positional advantage' allows it to exhibit stronger resilience under similar macro shocks. Meanwhile, in a high oil price environment, real interest rates remain elevated, increasing the opportunity cost of holding gold. Bitcoin, lacking physical holding costs, gradually gains an edge in relative comparison.
As the shock persists, the market may enter a second phase, transitioning from inflation concerns to growth concerns. The weakening of industrial commodities like copper begins to reflect suppressed demand, with global growth expectations marginally softening. In this phase, the pure inflation logic is no longer sufficient to explain market movements, and the macro pricing framework begins to change.
From Growth Concerns to Policy Responses: Liquidity Expectations May Become a Key Variable
If the shock continues further, the market is likely to enter a third phase: the policy response stage. When growth pressures intensify and financial conditions continue to tighten, policymakers often intervene through fiscal or monetary measures, including price controls, subsidies, or broader liquidity injections.
The key change in this phase is that market pricing will shift from 'inflation-dominated' to 'liquidity expectation-dominated.' Historical experience shows that in environments where liquidity is reinjected, Bitcoin often benefits from its non-sovereign asset attributes, demonstrating stronger resilience.
At the same time, the structure of global capital flows is also changing. Since the freezing of the Russian central bank's reserves, market trust in the 'neutrality' of reserve assets has been shaken. Resource-exporting countries are adjusting their asset allocation structures, gradually shifting from U.S. Treasuries and stocks to gold and other assets. This change compresses the global liquidity space and pushes up long-term interest rates, making the macro environment more complex. In this context, Bitcoin's relative performance depends not only on risk appetite but also on its position in the liquidity cycle. Once the market begins to price in expectations of policy easing, Bitcoin's relative advantages may further strengthen.
Overall, the evolution path of this macro shock is gradually transitioning from an 'oil-driven inflation shock' to a 'growth shock under energy constraints,' and may eventually enter a 'policy intervention-dominated liquidity phase.' In this process, traditional assets face dual pressures from interest rates and growth, while Bitcoin, having already undergone a certain degree of price adjustment and possessing higher sensitivity to liquidity, is demonstrating relative resilience.
For investors, the key at this stage lies not in short-term volatility itself but in identifying phase shifts in the macro narrative. Once the market shifts from inflation logic to liquidity logic, Bitcoin may transform from a passively pressured asset into a relative beneficiary in the new pricing cycle.
Some of the above views are from BIT on Target. Contact us to obtain the full BIT on Target report.
Disclaimer: The market carries risks, and investment requires caution. This article does not constitute investment advice. Digital asset trading may be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial experts. BIT is not responsible for any investment decisions based on the information provided in this content.
