Original Title: Bitcoin Is Up Since the War Started. Here's What That Actually Tells You.
Original Author: Crypto Unfiltered
Compiled by: Peggy, BlockBeats
Editor's Note: As oil prices surge, stock markets face pressure, and inflation expectations rise again, the market should enter a typical "risk aversion" phase - this is indeed happening in the current round of conflict in Iran. Energy prices have broken through key ranges, global assets are generally retreating, and macroeconomic uncertainty is rising rapidly (The Guardian). However, in this context, Bitcoin presents a phenomenon that is somewhat counterintuitive: it has not followed the continued decline of most risk assets, but instead outperformed stocks, gold, and even silver for a period of time (Investopedia).
This article revolves around a more critical question: what does this "counter-trend performance" actually mean?
From the perspective of short-term market reactions, Bitcoin still tends to drop during escalations in conflict and rebound during expectations of easing, indicating that it has not completely detached from its risk asset characteristics (Barron's). But from a longer time dimension, its relative returns, capital flows, and relationships with traditional assets are changing - it is no longer just a shadow of technology stocks and does not completely obey a single macro narrative.
The article further points out that the real core variable is not "the war itself," but rather how the war reshapes the global liquidity environment through oil prices, inflation, and interest rate expectations. This is also the underlying mechanism behind Bitcoin's price volatility. At the same time, institutional funds continue to allocate during turmoil, causing the pricing logic of this asset to gradually shift from "emotion-driven" to "structure-driven."
In this sense, the rise of Bitcoin is not an isolated price signal, but rather an explicit result of deeper changes - an asset is undergoing a process of identity reassessment.
When the market is still debating what it is, pricing has often begun to change.
Below is the original text:
The current global financial landscape is not optimistic. Oil prices are nearing multi-year highs, inflation expectations are rising again, and central banks are beginning to delay their interest rate cut schedules. Stock market sentiment is turning tense, and geopolitical risks have become the dominant variable for almost all asset classes.
However, since the escalation of the US-Iran conflict at the end of February, Bitcoin has risen by about 7%.
During the same period, the S&P 500 index fell by about 1%, gold dropped about 3%, and silver declined by nearly 9%. Yet Bitcoin - often criticized as a purely speculative tool, a "risk-preferring asset," or even an asset "clothed in technology stocks" - quietly outperformed all the aforementioned assets.
This data point deserves more attention than currently received.
Price Picture After Stripping Away Noise
In early October 2025, Bitcoin briefly reached an all-time high of $126,198. As of this week, its price hovers around $69,000, down about 45% from the peak. This number alone does not appear optimistic, but if observed in the current round of conflict, its performance appears different.
The trend is not smooth. On April 2, Donald Trump gave a prime-time speech threatening tough action against Iran, and Bitcoin dropped to $65,834 that day, marking a new low since 2026. Ethereum also fell about 5% on the same day. The market's initial response was quite direct: escalating conflict means declining risk appetite, and declining risk appetite typically means crypto assets are sold off.
But then, things began to change. Following the news of "a possible 45-day ceasefire," Bitcoin rebounded over 3% within hours, briefly exceeding $69,500, with daily trading volume surging to over $29 billion. The market's reaction was quick and clear.
The signal conveyed by this process is: the current market is viewing Bitcoin as a "geopolitical thermometer," rather than merely a speculative position. This shift in positioning itself holds significant meaning.
A Real Identity Crisis, and Why It Breeds Opportunity
Bitcoin is at a rather rare stage: it struggles to articulate its identity, and the market also cannot provide a clear positioning.
On one hand, it indeed begins to exhibit characteristics of a "safe haven asset." During the previous cycle, Bitcoin's high correlation with software stocks quickly broke down after the outbreak of conflict, and its correlation is now close to zero. It is no longer just an exaggerated "alternative to tech stocks."
On the other hand, Bitcoin still rises on news of "ceasefires" and "easing," and drops during escalations in conflict. This is typical behavior for risk-preferring assets - once the political situation deteriorates, it declines, making it difficult to simply define it as "digital gold."
A more accurate description is: the current Bitcoin resides in a transitional zone between two attributes. It is this uncertainty that creates opportunities for investors seeking to understand its structure.
An Unignorable Macro Headwind
The true bearish logic is also clear and deserves serious attention.
Since the conflict erupted, oil prices have risen by about 60%, with Brent Crude exceeding $107 per barrel at one point. Such energy shocks will directly transmit to already stubborn inflation levels and alter the Federal Reserve's rate-cutting path. The market currently almost universally expects the Fed to maintain interest rates in the April meeting, with limited room for rate cuts in the short term.
This is crucial for Bitcoin, as liquidity has always been the core fuel for its rise. The bull market from 2020 to 2021 was essentially built on an extremely loose monetary environment. When funds are abundant and cheap, Bitcoin tends to perform strongly; however, when central banks tighten policies, or even just "remain inactive longer than expected," this tailwind disappears.
Digital asset management firm CoinShares noted that in late March, digital asset investment products experienced outflows for the first time in five weeks, with Bitcoin products seeing outflows of $194 million. The reason is quite direct: prolonged conflict, rising inflation risks, and shifting rate expectations.
What investors really need to focus on is not the war itself, but rather how the war changes the path of monetary policy.
What "Smart Money" Is Doing
Amidst the intermixed long and short signals, the behavior of institutional funds is quite clear.
On April 6, the US spot Bitcoin ETF saw a net inflow of $471 million in one day, marking the strongest performance since late February and the sixth largest single-day inflow in 2026. Among them, BlackRock's iShares Bitcoin Trust (IBIT) has surpassed $54.5 billion in managed assets, accounting for nearly 60% of the entire spot Bitcoin ETF market. So far, the total net inflow into US spot Bitcoin ETFs has reached approximately $56 billion.
This is not a behavior driven by retail sentiment; rather, it reflects a rhythmic allocation by institutional funds while the broader market is in wait-and-see mode.
One possible interpretation is that large allocators view the $66,000 to $70,000 range as a "building area." In the memory of institutions, Bitcoin has just experienced an all-time high of $126,000, and entering at about $69,000 presents a risk-return structure completely different from chasing up at the high - this price range possesses genuine asymmetry.
How to Understand What Will Happen Next
Looking forward from the current point, the outcome is not symmetric, but it is not unpredictable either.
The probabilities currently predicted by the market indicate that the likelihood of achieving a ceasefire by the end of April is about 28%, rising to 55% by the end of June, and reaching 76% by the end of the year. This timeline itself provides key insights - the possibility of a quick resolution in the short term is low, but reaching some form of resolution within a few months remains the baseline scenario.
If this scenario occurs, the market's unfolding path is relatively clear: oil prices retreat, inflation cools, rate-cut expectations are rebuilt, liquidity expands again, and Bitcoin is likely to become the most resilient recovery asset in this environment. The same event that triggered the upheaval will reverse-drive recovery and even bring about a stronger rebound.
However, if the conflict drags into a stagflation trajectory, the situation becomes more complicated. Liquidity tightening, continued capital outflows, and the passive unwinding of leveraged positions in the futures market may further suppress prices. The $50,000 line has been mentioned multiple times as the next important support area.
A more honest answer is that no one can determine how the path will unfold. What investors can truly control is the alignment between position size and personal judgment, along with the holding period.
A Neglected Key Variable
Beyond the daily narratives of war, there is a more structural clue: the United States' "strategic Bitcoin reserve."
When a sitting president proposes incorporating Bitcoin into national strategic asset reserves, it will alter the long-term supply structure. This is not noise; it represents a fundamental shift in the relationship of the world's largest economy to this asset, carrying clear long-term bullish implications. It is just currently overshadowed by the conflict itself and has not been adequately priced in by the market.
As uncertainties gradually dissipate, the importance of this variable will resurface.
Conclusion
Bitcoin is neither a traditional safe haven asset nor a purely risk-preference target. A more fitting understanding is that it exists in a state of "transition" - on one hand, gradually gaining credibility through actual institutional fund allocations, and on the other, still retaining the inherent volatility of emerging assets.
The conflict makes the picture appear chaotic, but the underlying signals are not complex: institutions are buying, prices are far from near their highs, and the ultimate direction of the war will become a significant catalyst for the next phase.
The market has always been this way - uncertainty is often the source of opportunity.
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