Original | Odaily Planet Daily (@OdailyChina)
Author | jk
On February 28, 2026, the United States and Israel jointly launched a military strike against Iran. When the news broke, major financial markets around the world were closed, leaving only the crypto market to bear the undue pressure and the divergence of safe-haven expectations. Bitcoin plummeted nearly 6% in 45 minutes, dropping sharply from around $70,000 touched the previous week to a recent low of $63,038, triggering approximately $515 million in long liquidations and wiping over $128 billion from the total crypto market capitalization. The Crypto Fear & Greed Index immediately fell into the "extreme fear" zone.
Tokenize Capital managing partner Hayden Hughes 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 should have been dispersed across stocks, bonds, and commodities. True price discovery will only happen when the US stock market and Bitcoin ETFs reopen on Monday."
For long-term participants in the crypto market, this scene regarding 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 Planet Daily will review Bitcoin's price movements during the Russia-Ukraine conflict, the Israel-Gaza war, and the India-Pakistan conflict, and, combining the market performance and analyst predictions from this US-Israel-Iran war, attempt to梳理 the evolving complex relationship between war and the crypto market.
Russia-Ukraine War (2022)
On February 24, 2022, Russia launched a full-scale invasion of Ukraine. Bitcoin plunged about 8% within hours, dropping sharply from around $37,000 to $34,413, with the entire crypto market losing about $160 billion in value within 24 hours. Stock markets also plummeted simultaneously as investors rushed to exit risk assets.
However, just four days later, the market saw a dramatic reversal. Bitcoin experienced a rebound of over 14% in a single day, 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 increasing Bitcoin demand. Analysts attributed this bounce partly to Russians attempting to use crypto assets to evade sanctions, as well as demand from citizens in both Russia and Ukraine transferring assets into cryptocurrency as their domestic banking systems were impacted. In 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 subsequent months, the Fed raised interest rates sharply, the macro environment reversed drastically, and from the collapse of Terra to the implosion of FTX, Bitcoin fell to $16,000. The geopolitical premium sparked by the Russia-Ukraine war was淹没 by a larger cyclical bear market. Three months after the war began (late May 2022), Bitcoin was trading around $29,000, a net decrease of about 20% from pre-war levels.
Israel-Gaza Geopolitical Conflict (2023)
On October 7, 2023, Hamas launched a surprise attack on Israel, triggering the ongoing geopolitical conflict in Gaza. This time, the crypto market was almost unmoved.
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, which traders generally attributed to the negative impact of the Middle East conflict on investor sentiment. But this was the entirety of the conflict's impact on the market, which then completely dissipated.
Fifty days after the war began, Bitcoin's performance was far above its initial price at the start of the conflict. The war narrative was quickly overshadowed by native crypto market narratives such as ETF approval expectations and the halving cycle. In the following three months, Bitcoin surged from under $27,000 to the range of $44,000 to $49,000, driven primarily 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 rose to a historical high of $126,173. This indicates that, with the large-scale entry of institutional investors and ETF funds, Bitcoin's price logic is increasingly dominated by internal cycles rather than driven by external geopolitical events. Regional wars, even devastating ones, can hardly shake an increasingly mature financial market.
India-Pakistan Conflict (2025)
On May 7, 2025, India launched "Operation Sindhu," conducting missile strikes on infrastructure of armed groups within Pakistan, triggering the most intense direct military conflict between the two nuclear-armed nations in decades.
After the news broke, Bitcoin briefly fell to around $94,671, and Ethereum slipped to $1,774, but the decline was extremely short-lived. Four days later, both sides announced a ceasefire. The crypto market rebounded accordingly, 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 in Bitcoin's K-line chart.
Iran: Where Are We Now, and Where Are We Headed?
The outbreak of this US-Israel-Iran conflict found Bitcoin at a historically thin point in time.
Bitcoin had already fallen nearly 50% from its historical high of $126,173 in October 2025, and the entire crypto market had been 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 the spot ETFs were listed, with year-to-date cumulative net outflows reaching $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 entire crypto market lost about $128 billion in value within 24 hours, triggering over $515 million in liquidations.
Entering the second week of March, as US Treasury Secretary Scott Besant announced that the Trump administration was taking measures to suppress oil prices, market sentiment improved significantly. On March 13, Bitcoin rose to around $73,800, approaching a one-month high, with a single-day gain of nearly 5%, marking the first Friday with gains since the outbreak of the Iran war. On March 16, Bitcoin further climbed to about $73,882, breaking through the 50-day moving average. This was the first breakthrough in two months, seen by analysts as an important signal of a mid-term trend reversal. As of publication, Bitcoin has rebounded over 17% from the low at the start of the war.
Similar to History, But with More Variables
This price movement is highly similar to the "script" of previous conflicts—sharp drop, rebound, digestion. If the script is exactly the same, then we should currently be at the position of beginning to digest.
Looking at the three conflicts over the past four years, it is clear that geopolitical events themselves have difficulty leaving a lasting mark on Bitcoin's price. The reason the Russia-Ukraine war caused a substantial impact was not fundamentally due to the war itself, but because it triggered Western sanctions against Russia, pushed up global inflation, and coincided with two black swan events. The Gaza and India-Pakistan conflicts further proved that regional military conflicts, even severe ones, as long as they do not substantially disturb 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 depends 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. Conversely, if the conflict remains at its current intensity, oil prices fall, and negotiations resume, then based on historical experience, the impact of this war on Bitcoin's price will gradually dissipate.
