Markets reacted strongly after strikes involving the U.S., Israel and Iran produced one of the more substantial geopolitical shocks since 2022. Yet, despite heightened risk, a clear conclusion on whether Bitcoin or gold functioned as the dominant safe-haven has not emerged, according to new analysis from Capital.com.
Trading floors and platforms were active on Friday after Iran declared the Strait of Hormuz open to shipping following a ceasefire between Israel and Lebanon. The episode produced distinct flows across asset classes rather than a single, uniform flight to safety.
Capital.com reported that retail traders "did not rotate into Bitcoin. They rotated into oil," even as Bitcoin itself climbed almost 20% from the lows it reached after the initial strikes. Platform-level metrics cited by the firm show Bitcoin participation falling to 9% below pre-conflict levels, while gold "held its ground as the conventional crisis hedge."
Oil attracted the largest share of retail attention. Unique trader counts surged 328% relative to pre-conflict averages and trading volumes jumped 1,042% versus those same benchmarks, according to the note. Those moves underline the strong demand response in energy markets amid the regional disruption.
"When US and Israeli strikes hit Iran on the evening of 28 February, Bitcoin's immediate market reaction left little ambiguity. Within hours, over $128 billion in crypto market capitalisation was erased. Bitcoin fell from approximately $66,000 toward $63,000. Gold rose," the firm wrote.
Capital.com interprets that early drop as consistent with Bitcoin's increasing institutional ownership. As institutional investors have grown, Bitcoin has become more susceptible to the same risk-off selling that typically affects equities during sudden geopolitical shocks.
However, the asset's subsequent performance complicated a straightforward narrative. Over the full conflict period, Bitcoin outperformed equities, buoyed in part by geopolitical developments that resurfaced its anti-fiat narrative. The firm highlighted reports that Iran requested Bitcoin for certain payments during closures of the Strait of Hormuz, framing that as an example of Bitcoin's use as an alternative payment system.
Senior Market Analyst Kyle Rodda said the episode demonstrates Bitcoin remains exposed to "significant cross currents," with inflation, sanctions and risk sentiment pulling it in different directions.
Capital.com's concluding assessment was that the episode adds a new data point to the safe-haven debate but does not produce a decisive victor: "The safe-haven debate has a new data point - and neither side wins cleanly."
Context and implications:
- Retail flows favored oil over crypto and precious metals during the acute phase of the shock.
- Gold remained resilient as a conventional crisis hedge, while Bitcoin experienced both sharp initial losses and a later recovery.
- Institutional ownership appears to have shifted Bitcoin's short-term behavior closer to that of equities during risk-off episodes.