The Game in the Fire: The Triangular Relationship Between Cryptocurrency, US-Iran Conflict, and US Stocks

The weekend explosions not only echoed through the Middle East but also shook global capital markets. When the US-Iran conflict suddenly escalated, the Strait of Hormuz faced de facto blockade, and an interesting phenomenon occurred: the cryptocurrency market led the plunge, then strongly rebounded before the US stock market opened on Monday, while US stocks showed remarkable resilience amid intense volatility. What kind of capital logic is playing out among these three?

Cryptocurrency: Weekend “Pressure Valve” and Monday “Barometer”

In the early hours of March 1, news of US military strikes against Iran broke, causing the crypto market to evaporate $128 billion within minutes. Bitcoin briefly fell below $63,000, with over 100,000 traders liquidated. However, a dramatic scene soon unfolded—after confirmation of the death of Iran’s Supreme Leader Khamenei, cryptocurrencies collectively surged, with Bitcoin once breaking through $68,200 and Ethereum rising over 10%.

This “sharp drop followed by violent rebound” trend precisely reveals the special role of cryptocurrencies in the current geopolitical conflict. Hayden Hughes, Managing Partner of Tokenize Capital, pointed out: “Bitcoin is the only large liquidity asset traded 24/7, so it absorbs all the selling pressure usually spread across stocks, bonds, and commodities.” In other words, when traditional financial markets are closed on weekends, cryptocurrencies become the only outlet for capital hedging and emotional venting.

However, the real test comes on Monday. Hughes warned: “The true price discovery will happen when the US stock market and Bitcoin ETFs reopen on Monday.” After opening, Bitcoin briefly surged to $70,100 but quickly retreated to around $67,000. This rise-and-fall pattern confirms market divergence: short-term speculators take profits on good news, while genuine institutional funds remain on the sidelines.

Notably, despite intense price fluctuations, US spot Bitcoin ETFs attracted $458 million on Monday, setting the strongest single-day fund inflow this quarter. This indicates that institutional investors tend to view the volatility triggered by war as a “manageable shock,” rather than systemic risk.

US Stocks: “Empiricism” Behind the Low Open and High Recovery

Compared to the sharp volatility in cryptocurrencies, US stocks appear more “seasoned.”

On Monday, the three major US stock indices all opened sharply lower but then repeatedly bought the dip during the session, with the Nasdaq even closing up 0.36%. Where does this “buy-the-dip” mentality come from?

Morgan Stanley strategist Michael Wilson’s team provided an answer: historical data shows that past military conflicts in the Middle East did not lead to long-term market declines. The firm’s statistics indicate that after “geopolitical risk events,” the S&P 500’s average gains over 1 month, 6 months, and 12 months were 2%, 6%, and 8%, respectively.

Bill Smead, founder of Smead Capital Management, went further: “Market participants believe all this is temporary, and issues in the oil sector will eventually subside.” This “empiricist” mindset enables US stocks to demonstrate remarkable resilience in the face of war shocks.

However, this resilience has its limits. Morgan Stanley warned that for the war to cause a significant and sustained blow to US stocks, oil prices would need to surge above $100 per barrel. Considering the Strait of Hormuz accounts for about one-fifth of global oil consumption transportation, if the blockade persists, this threshold is not out of reach.

The Reality Check of the Safe-Haven Narrative: Is Bitcoin Still “Digital Gold”?

A deeper question has emerged in this conflict: Is Bitcoin a safe-haven asset or a risk asset?

Market performance suggests the latter. In the early stages of escalation, Bitcoin declined in tandem with risk assets; during the rebound, its movements were highly synchronized with US tech stocks. This contrasts sharply with gold’s performance—spot gold rose for four consecutive days, firmly maintaining its status as a safe-haven asset.

FX168’s analysis report bluntly states: “Bitcoin is losing its ‘war premium,’ and its ‘digital gold’ label is more of a slogan that has not yet gained broad acceptance in capital markets.” The report traces historical data: on the day the Russia-Ukraine war broke out in 2022, Bitcoin plunged over 9%; during the outbreak of the Israel-Palestine conflict in 2023, Bitcoin fell about 2%; in 2024, after Iran’s airstrikes on Israel, Bitcoin declined about 7%.

However, Arthur Hayes, co-founder of BitMEX, offered an interesting perspective: “The longer the US intervenes in Iran, the more likely the Federal Reserve is to cut rates or print money to support war expenses, which could push Bitcoin prices higher.” This suggests that the positive effect of war on Bitcoin may not be direct safe-haven demand but an indirect result of loose monetary policy expectations.

Conclusion: The Future of the Triangular Relationship

At this point, a complex feedback loop is forming among cryptocurrencies, the US-Iran conflict, and US stocks: escalation of conflict → rising oil prices → increased inflation expectations → reduced rate cut expectations → pressure on risk assets → capital seeking alternative outlets. In this chain, cryptocurrencies may be favored by the “digital gold” narrative or sold off due to declining risk appetite.

In the coming days, markets will focus on two signals: first, whether the Strait of Hormuz remains permanently blocked, which will determine if oil prices break through $100; second, whether Bitcoin can hold above $70,000, which will decide if a new upward trend can be established.

For investors, in a 24/7 trading environment, true safe-haven might not be about choosing a specific asset, but about staying alert—recognizing the risk asset nature of Bitcoin, understanding the “empiricist” logic of US stocks, and maintaining disciplined investing amid the chaos of war. #深度创作营