As the conflict between Israel and Iran escalates, Bitcoin’s (BTC) price has remained stable.
A look back at previous conflicts shows a similar trend, with factors like adoption and institutional involvement playing a key role.
Analysts like André Dragosch, head of research at Bitwise’s ETP platform ETC Group, have argued that Bitcoin’s price can suffer in the days following the outbreak of a conflict. While volatility in BTC’s price is overall on a downtrend, it is still seen as a risky asset and is likely to be sold quickly when a war breaks out.
Still, as Mithil Thakore, co-founder and CEO of Bitcoin L2 liquidity protocol Velar, previously told Cointelegraph, “Over the longer term, geopolitical conflicts raise the prospects of higher inflation rates globally due to factors like increased fiscal spending, looser monetary policy, supply-chain disruptions and commodity price spikes, which should all benefit Bitcoin.”
Looking at past events of geopolitical instability, Bitcoin has shown remarkable resilience, but a lack of movement doesn’t necessarily mean that Bitcoin is a hedge during times of uncertainty.
Here’s a look at a few instances where Bitcoin’s price has reacted, or not reacted, to large-scale armed conflict in the world:
Israel-Iran war (June 13, 2025)
On June 13, Israel struck dozens of targets in Iran in the largest attack on the country since the Iran-Iraq war in the 1980s. The two countries, arch-rivals in the Middle East, have continued strategic missile strikes against each other over the following days.
Despite concerns over wider escalation, including calls by Israel to involve the United States, markets have largely shrugged off concerns. Bitcoin is no exception.
While the asset saw a brief drop immediately after the bombings began, the price has largely recovered. Crypto analyst Za said, “Bitcoin does not seem concerned about the Israel and Iran conflict (yet).”
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Perhaps the most famous Bitcoin bull, Michael Saylor, is also unfazed. On June 16, his firm, Strategy, acquired 10,001 BTC for $1 billion. The purchase comes after Strategy’s third Bitcoin-backed preferred stock, STRD, began trading on Nasdaq on June 11.
Israel-Iran embassy bombing (April 1, 2024)
On April 1, 2024, Israel struck an Iranian embassy complex in Damascus, Syria, killing several senior officials. In response, Iran seized the Israeli ship MSC Series and launched a series of attacks on Israel on April 13.
After both dates, the price of Bitcoin saw a brief downward movement, with BTC losing over 8% just after the April 13 retaliation.
Still, as markets became accustomed to the new norm, so did Bitcoin, and it continued moving upward.
Israel-Gaza war (Oct. 7, 2023)
On Oct. 7, 2023, Hamas forces from Gaza struck targets inside Israel, killing over 1,000 Israelis and triggering a war and humanitarian crisis that is still ongoing.
Israeli markets saw immediate dramatic losses, while major arms manufacturers like Lockheed Martin saw spikes in stock price.
Bitcoin remained fairly unaffected, and 50 days after the initial attacks, it was performing well above where it started.
Following the attacks, reports that Hamas had raised money in crypto led to renewed calls from regulators to tightly regulate the space, with the US Treasury sanctioning a Gaza-based crypto operator with alleged ties to the group.
Blockchain forensic firm Elliptic said there was “no evidence” to support claims of Hamas raising funds in crypto.
Russia’s full-scale invasion of Ukraine (Feb. 24, 2022)
In early 2022, after eight years of war in the Donbas region of Ukraine, Russia initiated a full-scale invasion in what Moscow calls a “special military operation.”
Global financial markets were immediately affected, with economies closest to Ukraine suffering the worst. Countering this trend, Bitcoin’s price spiked upward and was up 16% just five days after the invasion.
Exchanges within Russia and Ukraine saw crypto trading at eye-watering premiums as people fleeing abroad sought to skirt currency controls with cryptocurrency.
One week after the start of the war, Ukraine had received over $70 million in cryptocurrency donations, mostly in Ether (ETH).
Bitcoin tanked later that year, but this was fueled by the collapse of the Terra stablecoin ecosystem and other market events, more than concerns over the war in Ukraine.
Bitcoin’s price and internal conflicts
While crypto may serve as a risk-off asset during times of conflict in some parts of the world, its price movements appear to ignore internal conflicts outside of those affecting traditional markets in Europe, the Middle East and North America.
In November 2020, war broke out in the Tigray region of Ethiopia after years of tension between the left-wing ethno-nationalist Tigray People’s Liberation Front and the federal governments of Eritrea and Ethiopia.
The war, which left hundreds of thousands dead and millions internally displaced, was characterized by the Catholic Near East Welfare Association as underreported. A 2024 report from Geographical called it “the war the world forgot.”
Bitcoin’s price didn’t take much notice either. The main narrative dominating the crypto market then was the assets’ unprecedented bull run driven largely by inflation worries from the COVID-19 pandemic and institutional adoption by Block (then Square) and Strategy (then MicroStrategy).
Later that year, just months after the outbreak of the Tigray war, on Feb. 1, 2021, the Tatmadaw of Myanmar overthrew the National League for Democracy in a coup d’état, sparking a civil war, which is ongoing.
A month later, Bitcoin’s price would reach its then-all-time high of $69,000.
Bitcoin and “proximity” to conflict
A key factor in the discussion of Bitcoin’s reaction to conflict is the degree to which Bitcoin is adopted — i.e., has exposure or correlation to traditional markets.
Some economists have noted the effect of the geographic proximity of conflict. Financial markets in countries closer to a conflict zone will see more volatility and losses.
Overall crypto adoption is highest in developing nations, with India, Nigeria and Indonesia leading the pack, according to Chainalysis’ 2024 Global Adoption Index. This index includes onchain crypto and retail value received by centralized services, and onchain crypto and retail value received by DeFi protocols.
Related: BlackRock drives $412M Bitcoin ETF inflows amid Israel-Iran conflict
Bitcoin, by comparison, is finding increasingly concentrated ownership among Western institutions and world governments. As of December 2024, 1% of Bitcoin was owned by ETFs alone, more than by Satoshi Nakamoto.
The biggest holders are now ETF issuers like BlackRock, regulated crypto exchanges like Kraken and Coinbase and even the US government.
Bitcoin has only recently enjoyed this degree of adoption and, therefore, exposure to traditional financial markets and institutional investment.
In 2013, Bitcoin went on what some consider its first major bull run. It started the year at $13, crossing $100 by April and $200 by October. The end of the year saw it close out over $1,000.
A “crypto winter” started the next year, in addition to two armed conflicts: the Donbas war, including Russia’s annexation of Crimea, and the 2014 Gaza war.
During this time, crypto was still in a niche industry, and miners could use the graphics card on their gaming computers to mine Bitcoin. Kraken and Coinbase were only three and two years old, respectively.
Institutional involvement was next to nonexistent, and many regarded crypto as “magic internet money” suited only for accommodating illicit activity online.
While the onset of both conflicts affected stock markets, both regionally and farther afield, there was no discussion in crypto media, such as it existed at the time, of the wars’ effect on Bitcoin’s price.
Bitcoin’s reaction to war could be changing
Now, with increasing institutional adoption, a crypto-friendly American government and international trade conferences drawing in thousands, Bitcoin’s price may be more influenced by the negative forces armed conflict puts on markets.
Almost all of the above conflicts, which saw Bitcoin prices quickly rebound, occurred before widespread institutional adoption. This paradigm shift has seen the narrative around Bitcoin change from a risk-off to a risk-on asset. BTC has more correlation to traditional financial markets than it did previously.
Still, analysts are cautiously optimistic about Bitcoin in the current climate. QCP stated in a June 16 note that escalation could see oil prices spike, particularly an “Iranian blockade of the Strait of Hormuz,” with potential US involvement disrupting global risk assets.
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