Did Bitcoin’s safe haven status falter following US actions in Iran? BlackRock’s 60-day analysis suggests potential future trends.

Bitcoin’s price commenced the US trading session with a robust increase of 3%, surpassing $68,000, as reported by CryptoSlate’s data.

This represented a notable contrast to its initial reaction, which did not resemble a typical safe-haven trade in light of the recent tensions in the Middle East.

Following reports over the weekend regarding US strikes on Iran, the leading digital asset dipped below $64,000 before finding stability, acting less like a safe-haven asset and more like a liquid, continuously traded risk asset.

Conversely, gold experienced an upward movement, approaching $5,376 per ounce as investors sought traditional forms of protection.

In the foreign exchange market, both the Swiss franc and Japanese yen appreciated, while the dollar also strengthened, indicating that markets were preparing for broader repercussions.

The significance of that initial movement is notable, but the subsequent phase is even more critical.

For Bitcoin, the crucial inquiry is seldom about what transpires in the first 24 hours following a geopolitical event.

It is more about what occurs after the initial wave of liquidations subsides, oil stabilizes, and markets begin to assess whether the situation represents a lasting macroeconomic issue or merely a brief, intense disruption.

This is where historical patterns become more intriguing and supportive for Bitcoin than the initial price movement might imply.

Why Bitcoin typically declines initially

Bitcoin’s market structure renders it particularly susceptible during the initial phase of any shock.

The digital asset is traded continuously, including on weekends and during hours when equity markets are closed. This positions it as one of the first venues for global investors to express anxiety or liquidate assets.

In times of uncertainty, assets that remain open tend to absorb the earliest pressures.

Additionally, Bitcoin is relatively easy to liquidate. During spikes in volatility, investors often reduce positions in the most accessible markets, and cryptocurrency markets are perpetually open.

This has consistently made Bitcoin a pressure release for broader risk sentiment, especially when macroeconomic news breaks outside traditional market hours.

Moreover, leverage plays a role. Forced liquidations can transform a headline into a cascading effect, driving prices lower than what the initial news would suggest.

This year, the market has observed considerable Bitcoin liquidations amid a broader period of stress in risk assets, with thin liquidity exacerbating the situation.

These dynamics help clarify why Bitcoin may fail the initial safe-haven test without undermining the longer-term bullish outlook.

The first movement often revolves around liquidity and positioning rather than conviction. What follows depends less on the initial event and more on how it influences oil prices, inflation, interest rates, and dollar liquidity.

Oil is the key factor for the next 60 days

In the context of the US-Iran conflict, energy serves as the primary transmission channel, as it could significantly affect global markets.

Reuters previously indicated that if the conflict remains contained, Brent crude might drift toward the low $80s.

However, if disruptions escalate, oil prices could approach $100, potentially adding approximately 0.6 to 0.7 percentage points to global inflation in the event of a significant supply shock.

This distinction is crucial because oil can influence policy direction, and policy often impacts Bitcoin’s trajectory.

As of the latest update, oil prices have surged by around 9% to $80, according to FactSet data, marking the highest level in over two years.

Oil Price (Source: BarChart)

Thus, if the current spike in oil prices persists and inflation accelerates, central banks may have limited capacity to ease monetary policy.

Real yields could remain stable, and the dollar may continue to strengthen. This combination has historically dampened risk appetite and constrained recoveries in high-beta assets, including cryptocurrencies.

In such an environment, gold is better positioned as it directly benefits from fear and inflation hedging, while Bitcoin must navigate tighter financial conditions.

If oil stabilizes and the conflict appears contained, the scenario shifts. Hedges may unwind, and volatility could decrease.

The assets that were easiest to liquidate during the panic may rebound once forced selling ceases. This backdrop has sometimes led to stronger post-shock behavior for Bitcoin.

This is why the next 60 days are more significant than the weekend’s reaction. The initial movement signals to investors that fear has emerged. The subsequent movement indicates the nature of that fear.

ETFs have altered the market dynamics this time

The most significant structural change between the current market and previous years is the presence of institutional frameworks for Bitcoin that were absent before.

US-listed Bitcoin ETFs have established a visible demand channel and have also made it easier to monitor de-risking activities.

Data from SoSo Value indicated nearly $2 billion in spot Bitcoin ETF outflows within the first two months of this year, suggesting that part of the investor base was already adopting a defensive stance prior to the latest geopolitical developments.

This is important because any assertion that Bitcoin is positioned to outperform cannot rely solely on narrative. It must address a practical question: who is buying?

In earlier cycles, this question was more challenging to assess in real time. Now, it is partially visible through ETF flows.

However, this change has dual implications. If risk aversion continues, ETFs could amplify selling pressure by converting caution into sustained outflows.

Conversely, if tensions subside, they could also expedite a rebound by directing renewed demand into spot Bitcoin more effectively than previous market structures allowed.

This makes the upcoming phase particularly significant. Bitcoin now benefits from deeper institutional frameworks, but these frameworks can transmit both stress and recovery.

Furthermore, internal crypto positioning indicates that the market has not fully committed in either direction.

Stablecoin dominance has remained around 10.3%, while approximately $22 billion in net inflows into stablecoins over a few weeks suggests that investors are shifting into cash equivalents rather than exiting the ecosystem entirely.

In the options market, CryptoSlate has previously noted that Bitcoin traders are increasingly paying for downside protection, although they remain cautiously optimistic about the market.

These signals can be interpreted in contrasting ways. On one hand, they reflect a cautious, hedged market.

On the other hand, they also indicate potential available capital. Thus, if fear diminishes, sidelined funds could return swiftly.

What history indicates about Bitcoin’s future

BlackRock, the $13 trillion asset management firm, has attempted to contextualize Bitcoin’s behavior during geopolitical events by comparing it to the performance of gold and the S&P 500 ten days and sixty days after significant shocks.

The findings revealed that once Bitcoin navigated the initial turbulence, it frequently emerged as one of the strongest rebound assets in the post-shock period.

For context, the January 2020 US-Iran escalation serves as the clearest illustration of the current scenario. According to BlackRock’s data, Bitcoin appreciated approximately 26% over the subsequent 60 days, while gold increased by roughly 7%. The S&P 500 declined by around 8%.

Bitcoin Price Returns After Major Shocks (Source: BlackRock)

This historical context is why the notion that Bitcoin can outperform during geopolitical crises continues to resurface, even after instances where it initially declines.

The range of potential outcomes is broad

Given this, the most straightforward way to approach the next 60 days is through various scenarios rather than certainties.

If the conflict remains contained and oil stabilizes around $80, the environment could support a Bitcoin rebound of 10% to 25% over 60 days, potentially pushing the BTC price above the $80,000 threshold.

In this scenario, gold might remain flat to slightly higher, while equities could stay rangebound. This setup aligns most closely with the historical pattern that positioned Bitcoin as a post-shock winner in 2020.

If tensions persist and oil stabilizes in the $90 to $100 range, the environment becomes considerably less favorable. Inflation concerns would likely resurface, policy easing could be postponed, and defensive trades would probably dominate.

In this context, Bitcoin’s range could extend from -15% to +10%, with gold outperforming and equities remaining under pressure. Here, the leading cryptocurrency could drop to as low as $56,479 or trade above $73,000.

A more severe disruption could convey a more negative outlook. If energy infrastructure or shipping encounters sustained stress, cross-asset de-risking could escalate.

In such a liquidity event, Bitcoin might underperform as a high-beta asset, potentially experiencing a decline of 10% to 30% over 60 days, while gold strengthens further. This could push BTC deeper into bear territory, falling below $50,000.

Conversely, there is also a potential scenario in the opposite direction.

If growth concerns escalate to the point where markets begin to anticipate quicker easing or liquidity support, Bitcoin could emerge as one of the primary beneficiaries.

Historically, some of its most robust post-shock rallies have occurred when the market transitions from inflation fears to expectations of policy accommodation.

The post Did Bitcoin fail its safe haven test after US strikes on Iran? BlackRock’s 60 day data hints at what comes next appeared first on CryptoSlate.