Bitcoin is behaving like a safe-haven. Here’s why that’s weird

When news that Iran’s Supreme Leader Ali Khamenei had been assassinated on Saturday morning, the price of Bitcoin plummeted nearly 8%.

For many, it would continue trading at that level. Investors have historically dumped Bitcoin at the first whisper of a geopolitical crisis.

This time is different. For now, at least.

Since the joint military operation by the US and Israeli governments started this past weekend, the price of Bitcoin has been trading to a different tune.

In fact, the digital asset managed to regain another 9% on Monday even as Iran continued to trade volleys with neighbouring countries, effectively recouping its losses since the attack.

“From a market perspective, crypto’s been doing pretty well since yesterday, and honestly, it’s not what you’d expect given the circumstances,” Laurens Fraussen, a research analyst with the crypto data firm Kaiko, told DL News on Tuesday.

“The US and Israeli airstrikes in Iran could’ve sent everything into a tailspin, but the market barely flinched, signalling some exhaustion from all the geopolitical tensions.”

Digital gold revival?

Bitcoin has long been touted by supporters as the ultimate safe-haven asset — a digital gold.

Now, it finally seems to be acting like one.

It cannot be controlled by a centralised government; its supply is fixed, and the technology has so far shown its resistance to even the most sophisticated cyberattack.

Over its 17-year-existence, however, it has had a terrible track record during uncertain global events.

The price of Bitcoin dropped 8% in February 2022 when Russia invaded Ukraine. Then, in April 2024, after Iran attacked Israel with a significant drone and missile strike, Bitcoin plunged 7%.

On each occasion, gold soared at market open.

So, what gives?

“Crypto markets dipped on Saturday amid initial concerns over the Iran war, but have since rallied due to the effectiveness of the initial US-Israel strikes,” Carlos Guzman, an analyst at market-making firm GSR, told DL News.

“It seems market participants are pricing in a contained conflict that won’t have significant spillover effects and could end quickly.”

US President Donald Trump has said the war could last five weeks, but that it could go “far longer.”

Though equity markets, such as the S&P 500 and the Nasdaq, are down over 1% at press time, they opened on Monday relatively unscathed.

“What’s interesting is that when US markets opened, equities were barely affected, which gave crypto the green light to keep pushing higher,” Kaiko’s Fraussen said.

Bitcoin is down 2% on Tuesday evening, trading at just over $67,000.

And though it hasn’t haemorrhaged over the last 48 hours doesn’t mean it won’t.

“Market sentiment could flip if this turns into a prolonged conflict,” Guzman said. “We could see negative price action the longer this drags on.”

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.