Bitcoin has emerged as an unexpected winner in global financial markets following the Iran conflict, while gold—traditionally considered a safe-haven asset—declined.
According to CNBC, bitcoin prices rose approximately 8% in the two weeks since the Iran conflict erupted on the 28th of last month. During the same period, the S&P 500 fell 3% and the Nasdaq dropped 2%.
Gold, widely regarded as a premier safe-haven asset, failed to benefit from the geopolitical crisis. Gold prices fell about 3% since the conflict began. Bloomberg reported that spot gold traded at $5,019.68 per ounce on the 14th, down 1.2% from the previous day. Silver declined 4.2%, while platinum and palladium also weakened.
Analysts attribute this trend to rising inflation pressures from higher oil prices following the conflict, which dampened expectations for interest rate cuts. As rate-cut expectations diminished, U.S. Treasury yields became relatively more attractive as an alternative safe haven, putting downward pressure on precious metals prices.
"Gold is not benefiting despite the geopolitical crisis," said Barbara Lambrecht, commodities analyst at Commerzbank.
The cryptocurrency market, however, has seen increased trading activity since the conflict. The ability to trade 24 hours a day—one of cryptocurrency's key advantages—has proven attractive to investors.
According to The Wall Street Journal, the conflict has also drawn attention to new oil-tracking cryptocurrencies. Cumulative trading volume for WTI perpetual futures cryptocurrency listed on the Hyperliquid exchange surged from $339 million on the 28th of last month to $7.3 billion on the 13th of this month.
"Being able to trade assets around the clock using leverage is particularly attractive to traditional traders during weekends when conventional financial markets are closed," said Hanson Biringer, director at Flowdesk.
On-chain data also shows accumulation activity among investors. Cryptocurrency sentiment analysis platform Santiment noted in a recent report that wallets holding between 10 and 10,000 bitcoin are increasing their purchases. "Their recent shift to accumulation is a bullish signal," the platform stated.
As of last week, these wallets held 68.17% of total bitcoin supply, up 0.1 percentage points from 68.07% a week earlier.
However, whale investors—large holders with 10 to 10,000 bitcoin—have shown significant volatility. According to Santiment, when bitcoin prices briefly approached $74,000 after breaking $70,000 earlier this month, whales sold approximately 66% of the bitcoin they had purchased between February 23 and March 3.
Santiment identified the buying and selling patterns between whales and retail investors as a key variable for determining market direction. If whales continue accumulating while retail holdings decline, bitcoin may be forming a local bottom, the analysis suggested.
"The ideal picture is whale holdings increasing while small wallet holdings decrease," Santiment explained. "This would mean coins are moving from weak hands to strong hands."
However, both whales and retail investors have recently been buying simultaneously, which tempers optimism. Historically, bitcoin prices have often bottomed when retail investors lose hope and sell.
"Historically, markets tend to bottom when the crowd loses hope," Santiment noted. "The continued optimism among retail investors is the biggest reason it's difficult to confirm a bottom at this point. Markets rarely reward the majority consensus immediately."