Bitcoin in the Battle: What stage is the encryption market now

Original Odaily Daily@OdailyChinaI'm not sure

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On 28 February 2026, the United States and Israel jointly launched a military strike against Iran. At the time of the news, the world’s major financial markets had been closed, with only the encrypted markets taking on undue pressure and risk-averse expectations. Bitcoin has collapsed by nearly 6 per cent in 45 minutes, from the recent low point of about $70,000 touched in the previous week to $63,038, triggering more than $515 million in forced silos and evaporating the overall market value of encryption by over $128 billion. The coded panic and greed index fell into the "extreme panic" area。

Tokenize Capital's management partner Hayden Hughes commented to the outside world on the day of the strike: “bitcoin is the only large liquid asset that is traded 7x24 hours, so it carries all the pressure that should have spread over stocks, bonds and large commodities. The real price didn't happen until Monday when the U.S. stock market and Bitcoin ETF reopened."

For the long-term companions of the encrypted market, the scene of geo-conflict is not new。

In the last four yearsThe encryption market has undergone three major geopolitical stress testsThe results are different each time. This Odaily Daily will review the movement of bitcoin during the Russian-Uu-Ukrainian conflict, the Israeli-Gaza war, the Indian-Palestinian conflict, and the three geologic events, and try to streamline the evolving and complex relationship between war and encrypted markets, taking into account the U.S.-I.-Iraq market performance and analysts’ predictions。

Russian-Uu war (2022)

On February 24, 2022, Russia fully invaded UkraineBitcoinreakedabout8% in hoursFrom approximately US$ 37,000 to US$ 33,413, the market value of the entire encryption market evaporated in 24 hours to about US$ 160 billion. The stock market collapsed simultaneously and investors competed for flight-risk assets。

However, only four days laterA dramatic reversal of the marketI don't know. Bitcoin received more than 14 percent of the single-day rebound, the largest single-day increase in over a year. Within one month, prices were approximately 27 per cent higher than before the invasion, touching $47,000。

This time, the war was fought backThere's a clear upward trend in bitcoin demandI don't know. The analysts attributed part of the reboundRussians are trying to circumvent sanctions using encrypted assets and the need for Russians and Ukrainians to transfer their assets to encrypted currency after their own banking system was hit。During that short window, bitcoin did show some kind of "anti-institutional currency": In the extreme environment of both sovereign currencies and traditional banks, there is a surge towards a more stable and stored value asset, Bitcoin。

However, this attribute did not last; in the following months, the Fed significantly increased interest rates, and the macro environment sharply reversed, with bitcoin falling to $16,000 when Terra collapsed to the FTX crash. The geopolitical premium triggered by the Russian-Uu war was flooded by the larger periodic bear market. Three months after the war (end of May 2022), Bitcoin offered about US$ 29,000A net drop of about 20% compared to the pre-war period。

Israel-Gaza geo-conflict (2023)

On 7 October 2023, Hamas raided Israel, triggering the ongoing geo-conflict in Gaza. This time, the encrypted market is hardly moving。

Bitcoin fell by 0.3% the day it startedIt was about US$ 27,844 and showed surprising indifference in the face of a regional war that caused tens of thousands of casualties. On the fourth day of the war, Bitcoin fell by $27,000, a new low since September, and traders generally attributed it to the negative impact of the Middle East conflict on investor sentiment. But this has been the full impact of geo-conflicts on markets and has since been completely dispersed。

FIFTY DAYS AFTER THE WAR, BITCOIN'S PERFORMANCE WAS FAR HIGHER THAN THE INITIAL PRICES OF THE WAR, AND THE NARRATIVES OF THE WAR WERE QUICKLY COVERED BY THE ORIGINAL NARRATIVES OF THE ENCRYPTED MARKET, SUCH AS ETF'S APPROVAL OF EXPECTATIONS AND THE HALVING OF THE CYCLE. IN THE FOLLOWING THREE MONTHS, BITCOIN JUMPED FROM LESS THAN $27,000 TO BETWEEN $44,000 AND $49,000, DRIVEN MAINLY BY THE HISTORIC APPROVAL OF BITCOIN SPOT BY US SEC IN JANUARY 2024. THE CONFLICT IN GAZA CONTINUED FOR MORE THAN TWO YEARS, DURING WHICH THE BITCOIN ROSE TO A HISTORIC HIGH OF $126,173. IN OTHER WORDS, AS INSTITUTIONAL INVESTORS AND ETF FUNDS ENTER ON A LARGE SCALE, THE PRICE LOGIC OF BITCOIN HAS INCREASINGLY BEEN DRIVEN BY INTERNAL CYCLES RATHER THAN EXTERNAL GEOLOGIC EVENTS。Regional wars, even on a massive scale, have proved difficult to shake a growing financial market。

India-Pakistan conflict (2025)

On 7 May 2025, India launched “Operation Sindur” to launch a missile strike against the infrastructure of armed groups in Pakistan, the most intense and positive military conflict in decades between two nuclear-weapon States。

Following the news, Bitcoin fell briefly to about US$ 94,671 and to US$ 1,774 in the south of the country, but it fell very briefly. Four days later, the parties declared a ceasefire. The encryption market then rebounded and bitcoin recovered to over $103,000. The market then quickly returned to normal trading rhythms, and the conflict was weakSO IT'S ALMOST IMPOSSIBLE TO FIND THE CORRESPONDING TRACES FROM THE BITCOIN K LINE AFTER ALL。

Iran: Where are we? Where are we going

The outbreak of this American-Israeli conflict has found a thin point in the history of Bitcoin。

BITCOIN HAS FALLEN BY ALMOST 50 PER CENT SINCE OCTOBER 2025, WHEN THE HISTORICAL HEIGHT OF $126,173 FELL, AND THE ENTIRE ENCRYPTION MARKET HAS BEEN UNDER PRESSURE SINCE LATE OCTOBER 2025. IN FEBRUARY 2026, BITCOIN ETF RECORDED APPROXIMATELY $3.8 BILLION IN NET ONE-MONTH OUTFLOWS, REPRESENTING THE WORST SINGLE MONTH SINCE THE LISTING OF THE SPOT ETF, AND THE CUMULATIVE NET OUTFLOWS SINCE THE BEGINNING OF THE YEAR AMOUNTED TO $4.5 BILLION. MEANWHILE, GOLD ETF ABSORBED ABOUT $16 BILLION IN NET INFLOWS OVER THE SAME PERIOD, AND THE DIVERSION BETWEEN “DIGITAL GOLD” AND REAL GOLD BECAME ONE OF THE MOST PROMINENT MACRO-TRADING TRANSACTIONS AT THE BEGINNING OF 2026。

On the day of the war, United States President Tripp confirmed that the United States military had begun combat operations against Iran, and that the entire encrypted market value had evaporated within 24 hours to some $128 billion, triggering a forced silo of more than $515 million。

In the second week of March, there was a marked improvement in market sentiment with the announcement by United States Treasury Secretary Scott Becent that the Trump administration was taking measures to suppress oil prices. On March 13th, bitcoin rose to nearly US$ 73,800, approaching a month's height, increasing by nearly 5 per cent a day, the first Friday-related trading day recorded since the war in Iran. On 16 March, Bitcoin further rose to approximately $73,882 and breached the 50-day moving average. This was the first breakthrough in two months and was seen by analysts as an important turning point in the medium-term trend。By the time the manuscript was sent, bitcoin had rebounded by over 17 per cent at a lower point than it had at the time of the war。

Similar to history, but with more variables

This movement is highly similar to the "play" of previous conflictsIt's falling, rebounding, digesting。If the script is exactly the same, then we should be at the beginning of digestion。

One of the obvious things about the three conflicts of the last four years isThe geopolitical events themselves make it difficult to leave a lasting mark on the price of bitcoin。The real impact of the Russian-Uu war is due not to the war itself, but to the fact that it triggered Western sanctions against Russia, pushed global inflation, and added two black swans. The Gaza-India conflict is further proof of thisRegional military conflicts, even on a massive scale, can quickly return to their narratives after a brief shock, as long as energy supplies and global monetary policy are not substantially disturbed。

Is there an exception to this American-Israeli conflictOil pricesI don't know. The Holmuze Strait carries about one fifth of the global oil flow, inflation will be rekindled if it is truly blockaded, the Fed’s interest rate reduction is expected to collapse, and Bitcoin’s macro-pressure as a risk asset will go well beyond the panic of early war. On the other hand, if the conflict remains within its current intensity, oil prices fall back and negotiations resume, based on historical experienceThe impact of the war on the price of the coin will gradually fade away。