As the United States and Israel's military actions against Iran enter a new phase, cryptocurrencies again came under pressure on Monday. Bitcoin briefly dipped to around $68,150, hitting its lowest point since early March, while Ethereum's decline neared 5%. This trend indicates that amid geopolitical conflicts driving up oil prices and rekindling global inflation concerns, cryptocurrencies are still mainly viewed as high-volatility risk assets by investors, rather than stable safe havens.
Market Reaction
Since the US and Israel launched military strikes against Iran on February 28, the conflict has entered its fourth week. Reuters reported that the conflict has disrupted passage through the Strait of Hormuz, which accounts for about one-fifth of the global oil and liquefied natural gas transportation. The risks to energy supply quickly reflected in asset prices, with Brent crude rising about 55% recently, climbing to around $110, and exceeding $113 at one point. There was also a significant outflow from global stock funds.
Safe-Haven Attribute Test
Bitcoin's performance during this conflict once again exposed the limits of its "digital gold" narrative. Although some market participants believe that Bitcoin experienced a shallower pullback compared to the stock market and maintained liquidity through its 24/7 trading mechanism, its price has been significantly constrained by oil prices, the dollar, real interest rates, and changes in risk appetite. The Block previously pointed out that there is still disagreement in the market about whether Bitcoin has formed a true safe-haven attribute, and some rebounds are more likely the result of technical corrections after deleveraging positions rather than stable safe-haven buying.
Capital Flows
However, the crypto market is not without resilience. Decrypt, citing Coinbase Asia Pacific Managing Director John O’Loghlen, noted that after several rounds of deleveraging, Bitcoin's risk-adjusted performance outperformed traditional assets. Meanwhile, in mid-March, the US spot Bitcoin ETF recorded consecutive net inflows, indicating that institutional funds have not fully withdrawn but are maintaining selective allocations amid geopolitical shocks and macro uncertainties.
Investment Outlook
In the short term, crypto assets will remain highly anchored to two main lines: whether the Middle East situation further spills over into energy infrastructure, and whether rising oil prices will force major central banks to maintain a hawkish stance. If Brent oil prices remain above $100, concerns about a resurgence in inflation and delayed rate cuts may continue to suppress high-beta assets, including cryptocurrencies. However, if ETF funds maintain net inflows and Bitcoin continues to outperform certain stock indices, its narrative as a "macro-hedge asset" may gain some recovery. The above assessments are based on current market signals.
