For much of the past two years, Bitcoin has tracked US monetary policy expectations closely — rising on rate cut hopes, falling on hawkish signals. That relationship now appears to be weakening. Geopolitical developments, particularly those affecting oil markets, are increasingly shaping price action, according to CoinShares Research.
Unexpected resilience
Since the escalation of tensions involving Iran, Bitcoin has gained approximately 10%, while equities declined and gold posted only modest gains. What stands out is the break from historical behaviour: during past geopolitical shocks, Bitcoin typically sold off sharply. This time, it absorbed the stress and held its ground.
Several factors account for this resilience. The market entered the event in an unusually clean technical state. Leverage ratios had normalised from around 33% in October 2025 to approximately 25%, broadly in line with long-term averages. Valuation metrics indicated Bitcoin was trading below its realised value — a signal historically associated with cyclical market troughs rather than the beginning of new downside.
Macro backdrop under pressure
On the economic front, the February US employment report was a significant miss: approximately -90,000 jobs against a consensus of +60,000. In most macro environments, a miss of that magnitude would trigger meaningful repricing of rate cut expectations. Markets largely absorbed it without a major reaction — a clear sign that investor attention has shifted toward energy markets and their inflation implications.
US pump prices have risen roughly 25% since geopolitical tensions intensified, and upcoming inflation prints will likely reflect this. The probability of a Federal Reserve rate cut in June has fallen to around 20%, the lowest level of this cycle.
Crypto ETPs record $1.4B in inflows
Digital asset investment products (ETPs) recorded three consecutive weeks of net inflows, totalling approximately $1.4bn since the start of the Iran crisis. The persistence of these flows suggests institutional investors are not only maintaining but actively adding to their Bitcoin exposure during geopolitical turbulence — behaviour more consistent with safe haven allocation than speculative risk-taking.
The bottom line
Bitcoin appears to be undergoing a fundamental transition: from a pure liquidity proxy to an asset with genuine geopolitical hedge characteristics. If that shift is sustained, it strengthens the case for Bitcoin in an environment defined by persistent geopolitical tension and a monetary policy constrained by energy-driven inflation.