Author: Ada, Shenchao TechFlow

In the early morning of February 28, the United States and Israel launched a joint military strike against Iran.

Textbooks state: When war comes, buy gold.

But this time, the textbooks seem to be wrong.

Gold briefly surged from $5,296 to $5,423, then dropped to around $5,020, closing negatively for two consecutive weeks. Bitcoin rebounded from a panic low of $63,000 to $75,000, gaining over 20%, outperforming gold, the S&P, and the Nasdaq.

The same war, the same period of time, gold falls, Bitcoin rises.

What exactly happened?

Gold: Choked by Interest Rates

On the day the war broke out, gold's performance was relatively normal. On the 28th, gold prices surged 2%, breaking through $5,300. Panic buying flooded in, and everything looked just like the historical script.

Then the script collapsed.

On March 3, gold prices plummeted over 6%, falling to $5,085. In the following two weeks, prices fluctuated between $5,050 and $5,200, with unclear direction. As of the time of writing, spot gold is around $5,020, having dropped nearly 10% from the historical high of $5,416 at the end of January.

The war is still ongoing, shells are still flying, yet gold keeps falling.

The chain of events is as follows: In this war, the Strait of Hormuz was blockaded. About one-fifth of the world's sea-borne oil must pass through this waterway. Iran's blockade of the strait led insurance companies to withdraw coverage for ships, tankers stopped operating, and oil prices surpassed $100. The International Energy Agency urgently released 400 million barrels of strategic oil reserves, double that released during the 2022 Russia-Ukraine war. TD Securities commodities strategist Daniel Ghali stated, "Such a large gap cannot be plugged."

Surging oil prices ignited inflation expectations. The market began to reprice the Federal Reserve's interest rate cut path. Before the war, the market had expected two rate cuts in 2026. However, according to Bloomberg, traders now estimate the probability of a rate cut at this week's Federal Reserve meeting to be nearly zero.

High interest rates are the nemesis of gold. Gold does not earn interest; the higher the rate, the greater the opportunity cost of holding gold. Funds naturally flow to income-generating assets like U.S. Treasuries. Commerzbank commodities analyst Barbara Lambrecht pointed out, "Gold prices have failed to benefit from this geopolitical crisis. Oil and natural gas prices surged again this week, increasing inflation risks, which may force central banks to take countermeasures."

The traditional logic is that war triggers panic, and panic drives up gold. But this time, the chain has changed—war led to soaring oil prices, which in turn triggered inflation, inflation locked in interest rates, and interest rates suppressed gold. Gold fears not the war itself, but the inflationary consequences brought about by the war.

There is another more alarming signal. The president of the Polish central bank recently publicly stated that he is considering selling part of their gold reserves to lock in profits. For the past three years, global central bank gold purchases have been the biggest driver of rising gold prices. If even central banks start to loosen, cracks will appear in gold's long-term support. Philip Newman, director of the London precious metals consultancy Metals Focus, said, "Some investors are disappointed by gold's tepid response after the outbreak of war, and have started to reduce their positions. This reducing of positions, in turn, reinforces the weakness in prices."

Bitcoin: Rising Against the Trend

On February 28, news of the U.S.-Israeli strikes against Iran emerged. Bitcoin was the only liquid asset still trading that day, crashing 8.5% in minutes, from $66,000 to $63,000.

Gold rose, the dollar rose, Bitcoin fell. Everyone's first reaction was the same: Bitcoin is a risk asset, not a safe-haven asset.

Looking back two weeks later, things are much more complicated than that judgment.

On March 5, Bitcoin rebounded to $73,156. On March 13, it briefly broke through $74,000. As of writing, Bitcoin is at $73,170, up about 20% from its pre-war low. During the same period, gold fell about 3.5%, and the S&P 500 dropped about 1%.

Bitcoin outperformed all traditional safe-haven assets. This is a fact. But why?

The most popular explanation in the market is: War leads to fiscal expansion and economic recession, forcing the Federal Reserve to eventually cut rates and print money, which benefits Bitcoin through loose liquidity. This narrative sounds appealing, but there’s an obvious logical flaw—if inflation from the war prevents the Fed from cutting rates, then "cash injection" won't happen. Moreover, even if the Fed does loosen, gold would benefit as well. The straightforward "expectation of cash injection" does not explain the divergence between gold and Bitcoin.

A more honest answer is that several factors combine together.

First, a technical rebound from overselling. Bitcoin fell from its historical high of $126,000 in October last year to $63,000, a drop of about 50%. At the beginning of February this year, a sudden wave of liquidations wiped out $2.5 billion in leveraged positions in a single weekend. Analysis by CoinDesk suggests that this liquidation "cleared out the weakest holders, resetting market positions," leaving a leaner market. So when the war came, there were not many weak hands left to offload Bitcoin in a retaliatory sell-off.

Second, the structural advantage of 7x24 trading. February 28 was a Saturday, and when the U.S. and Israel launched their strikes against Iran, global stock markets, bond markets, and commodity markets were all closed. Bitcoin was the only liquidity window that remained open. It was initially hammered down because panic funds needed to cash out immediately; but it was also the only place available for funds to flow back before the Monday market opened.

Third, the influx of ETF funds. The U.S. spot Bitcoin ETF saw a net inflow of over $1.34 billion in March, with net inflows for three consecutive weeks, the longest streak since July last year. BlackRock's IBIT attracted nearly $1 billion in new funds just in March. Meanwhile, the world's largest gold ETF (SPDR Gold ETF) saw outflows of over $4.8 billion in the same period. Funds are relocating, but this seems more like institutions reallocating their positions, and it's too early to conclude whether this constitutes a long-term trend.

Fourth, portability during wartime. This factor is rarely mentioned in mainstream analysis, but it is extremely important in the context of the Middle Eastern conflict. Dubai is the global hub for gold trading, connecting European, African, and Asian markets. After the outbreak of war, Dubai's gold logistics network was severely impacted, with disrupted shipping routes, insurer withdrawal, and physical gold stuck in warehouses unable to move out. You can't carry a ton of gold bars through a war zone. Bitcoin, on the other hand, is completely different—one can carry nothing, remember 12 mnemonic words, walk across a border, and have taken all their wealth with them. After the war broke out, the fund outflow from Iran’s largest crypto exchange Nobitex surged by 700%. This isn't about investors having faith in Bitcoin; it's about people voting with their feet during war, opting for what is easiest to take away.

Tiger Research noted in a report: "In finance, 'safe haven' refers to an asset that can maintain its price during a crisis. This is a completely different concept from 'an asset that can be used during a crisis.'" Bitcoin, in this war, clearly falls into the latter category.

No single factor can explain everything. But when combined, they can explain why Bitcoin performed better in this war than most people expected.

Two Surprises

Putting these two lines together, this war has created two surprises.

The first surprise is gold. It fell when it should have risen the most. This war directly impacts energy supply, triggering not just panic but inflation, with inflation expectations suppressing gold prices through the interest rate chain. Gold's safe-haven function is not unconditional—when the pathway of war conveys inflation rather than mere panic, gold gets stuck in the middle, unable to move. There’s also a physical vulnerability often overlooked: during war, moving physical gold is very difficult.

The second surprise is Bitcoin. It rose when it should have fallen the most. But this does not mean Bitcoin has "matured" into a safe-haven asset. Its performance resembles a combination of several technical factors and structural advantages. Aurelie Barthere, chief research analyst at Nansen, noted that Bitcoin’s sensitivity to negative war news has significantly decreased, with the European Stoxx index dropping more severely than Bitcoin during the same period. CoinDesk’s analysis puts it more accurately: "Bitcoin is not a safe haven, nor is it purely a risk asset. It has transformed into a 7x24 liquidity pool, absorbing shocks when other markets are closed, faster than anything else."

Every piece of news about escalating wars causes Bitcoin to drop. It just drops less each time and rebounds faster.

Old Map, New Continent

For the past five years, the market has told a concise and powerful story: Gold is the anchor in chaotic times, and Bitcoin is digital gold.

The Middle Eastern war of March 2026 dismantled this narrative.

Gold's thousands of years of safe-haven credibility hasn't collapsed, but it has exposed a weakness that is rarely articulated in textbooks: when the pathway of war is inflation rather than mere panic, interest rates can be more powerful than geopolitics. Bitcoin outperformed gold, but that does not mean it has taken up the banner of "safe-haven asset." Its rise is the result of an interplay between oversold rebounds, structural advantages, institutional allocation, and wartime portability, not a formal crowning of its identity by the market.

The subsequent trends depend on two variables: how long this war lasts, and how the Federal Reserve ultimately decides. Gold and Bitcoin are betting on different outcomes of the same war, and the outcome is still unknown.

The term "safe haven" may need to be redefined after this war. It is no longer a label for an asset class, but a question of time dimension—are you hedging against today's risks, or betting on the world of tomorrow?

Gold and Bitcoin have given two completely different answers.