Bitwise Asset Management believes that the current geopolitical crisis in the Middle East could catalyze a major Bitcoin rally. In its June 16 weekly newsletter, Bitwise Europe suggested that the sharp Bitcoin sell-off following the military escalation between Iran and Israel may soon reverse, citing historical data showing that BTC gained 31.2% on average within 50 days after major geopolitical shocks.According to the report, Bitcoin historically acts as a resilient asset during times of geopolitical instability. By analyzing the 20 most significant geopolitical events since July 2010, Bitwise found that in most cases, BTC rebounded strongly after an initial panic-driven drop.

“Major geopolitical risk events tend to be good buying opportunities for Bitcoin and other crypto assets,” the newsletter stated.

Missiles, Markets & Momentum

The hypothesis is currently being tested in real time. Since June 13, Iran has reportedly launched over 370 missiles at Israel, causing at least 24 deaths, while Israel retaliated by destroying more than 120 Iranian launchers and asserting “full aerial superiority over Tehran,” according to The Associated Press.

The violence triggered a flight to safety: gold hit a record high above $3,430/oz, Brent crude surged, and global equities sank. Bitcoin, which had neared its all-time high of $111,000, fell sharply to $102,600 before recovering to $107,239 at press time. Despite volatility, BTC still outperformed the S&P 500 last week.

Bitwise’s 3-Pillar Bull Thesis:

1. Behavioral Analysis:Past events like Russia’s 2014 annexation of Crimea and the 2020 US–Iran standoff sparked short-term panic selling, followed by swift BTC rebounds. Bitwise argues this pattern is now repeating.

2. Macroeconomic Tailwinds:Bitwise highlights the weakening U.S. dollar, as the DXY index fell to its lowest level since March 2022 due to soft inflation data and rising unemployment. Markets now price in nearly two rate cuts by December 2025, potentially loosening global liquidity, a favorable backdrop for Bitcoin.

3. Structural Demand Support:U.S. spot Bitcoin ETFs attracted $1.37 billion in inflows last week alone. MicroStrategy’s Michael Saylor revealed a fresh 10,100 BTC acquisition worth $1.05 billion, and Tokyo-listed Metaplanet added 1,112 BTC, bringing its total holdings to 10,000 coins.

On-Chain, Derivatives & Market Sentiment

On-chain indicators suggest bullish accumulation:

  • Whales withdrew 169,527 BTC from exchanges last week.

  • Exchange-held BTC reserves dropped to 2.92 million coins, just 14.6% of the supply, tightening liquidity.

  • The put-call ratio fell to 0.61, and the 25-delta options skew flipped to +4.87%, signaling a preference for upside exposure.

  • Funding rates on perpetual swaps remained positive despite geopolitical jitters.

Bitwise’s Crypto Asset Sentiment Index, which briefly dipped negative on Friday, already rebounded into bullish territory by Monday, driven by ETF flows and macro optimism.

Caution Remains Despite Bullish Setup

Skeptics argue that past performance isn’t a guarantee, and the dramatic rally following Russia’s 2022 invasion was partially fueled by extraordinary monetary stimulus, conditions that may not be replicated.

Bitwise acknowledged that $55.5 million in realized losses were recorded on-chain last week and noted a decline in “apparent demand.” Still, the firm maintains its bullish outlook, stating that the current macro and structural backdrop resembles historical pre-rally conditions.

“Structural demand by both ETPs and corporate treasuries, as well as continued macro tailwinds via Dollar weakness and global money supply expansion, still support a positive market development for Bitcoin and crypto assets,” the newsletter concluded.

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