The Middle Eastern conflict between Iran and Israel has sent a load of uncertainty into financial markets. Just today, over $135 billion was wiped from digital assets as investors assess the risks of a major conflict, especially if the U.S. actively takes part in it.
Historically, uncertain times have led investors to stock up on gold. In fact, they’ve been doing just that. Since the news broke, Gold has surged to its second–highest price against the U.S. dollar at $3,451 per ounce, further reinforcing its ability to store value.
Due to its scarcity and demand, Bitcoin is often referred to as “digital gold”, a direct comparison to how the precious metal behaves as an asset. But despite the nickname, Bitcoin’s behavior during crises has often diverged from gold, especially in the immediate aftermath of geopolitical shocks.
After all, while gold has been traded for decades, Bitcoin can still be considered in its infant stage, as it is only 16 years old.
Many consider Bitcoin’s big breakthrough as a store of value during the 2020/2021 pandemic. Boosted by a series of macroeconomic factors like more money in the hands of investors due to stimulus checks and low interest rates, $BTC at the time would go on to claim its highest-ever price.
At the same time, governments worldwide struggled to combat inflation. Printing money and injecting liquidity into the market seemed like the only solution, even at the expense of fiat currency stability.
With that notion in mind, let’s take a look at how Bitcoin behaved in similar times to today, after 2020.
Russia invades Ukraine (Feb 2022)
Russia first invaded Ukraine on February 24, 2022. Marking a significant escalation in the region. At the time, Bitcoin and the rest of the cryptocurrency market were facing a lot of hardship in staying bullish, as the U.S. Federal Reserve continued to hike interest rates to tame post-COVID inflation.
At the time, Bitcoin was trading around the $38K mark. Surprisingly, the digital asset surged nearly 20% over the next five days, fueled by investor optimism after Ukraine opened a BTC donation initiative to support its fight against Russia.
US–Iran Tensions (Jan 2020)
On January 20, 2020, still pre-COVID era, the U.S. mediated an attack on executed a targeted airstrike that killed Iranian General Qassem Soleimani, escalating tensions between Washington and Tehran. At the time, markets reacted sharply to the news of a potential conflict with Iran, as stocks and crypto lost value while investors rushed to gold.
Bitcoin, which was trading at $8,600 on that day; followed suit with the rest of the financial markets, losing nearly 5% in value in the following five days.
Hamas Attacks Israel (October 7, 2023)
On October 7, 2023, Hamas launched a surprise attack on Israel, marking the deadliest day for the country in decades and igniting a broader conflict in the region. Global markets immediately turned risk-averse as investors tried to assess how far the escalation could go, particularly if regional powers like Iran were drawn in.
Bitcoin went down from around $28,000 to $26,565 a week later. Ultimately, the crypto would go on to continue its upward momentum as the situation appeared to get more under control.
Trade War (April 2nd, 2025)
This year’s “Liberation Day” tariffs can also be considered a major catalyst for volatility in financial markets. At the time when Trump announced what was deemed to be a trade war with pretty much the entire world, Bitcoin and nearly all markets collapsed.
Bitcoin went on to collapse from $88,447, losing about 7% of its value on that very day. Uncertainty continues for several days, causing $BTC to dip by 16% only six days after April 2nd.
An Argument For Bitcoin
Bitcoin today is a completely different asset than it was even a year ago. Since then, institutional adoption has been on the rise, with major institutions like BlackRock, MicroStrategy, and other financial giants integrating Bitcoin into their strategies.
Also, Bitcoin has broken through the traditional finance barrier, as Bitcoin ETFs, futures, options, custodial services, and structured financial products have made investing more accessible, providing digital asset exposure to traditional investors.
Let alone the fact that Bitcoin is even being added to government reserves, as the likes of countries like El Salvador, Bhutan, and the United States have incorporated Bitcoin into their national reserves.
This greatly solidifies the idea of Bitcoin as an asset, bringing it far closer to the idea of a ‘hedge against inflation’. As adoption drives scarcity into the ecosystem, it reinforces Bitcoin’s role as digital gold.
As we can see, Bitcoin tends to react with short-term volatility during geopolitical shocks, often correcting or rebounding within days or weeks as broader market narratives take over.
While the current Iran conflict carries more weight than previous examples, it’s important to watch key indicators like oil and gold prices, as well as upcoming remarks from Federal Reserve Chair Jerome Powell, to better assess how traditional and digital markets might evolve in the days ahead.
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