On June 13, 2025, in the early morning, Israel launched "Operation Rising Lion," attacking multiple cities, military bases, and nuclear facilities in Iran. Recently, Iran's largest cryptocurrency exchange, N,obi,tex, was attacked by Israeli hackers, resulting in losses of tens of millions of dollars in stablecoins. Bitcoin fluctuated quietly amid the smoke of war, rising to nearly $110,000 before declining again. Through major wartime conflicts between 2020 and 2025, we can observe Bitcoin's sensitive reaction to geopolitical events. This article will deeply analyze the impact of major wartime conflicts on Bitcoin's price trend over the past five years and the recovery path of the cryptocurrency market after wars.
A turning point in the Russian-Ukrainian conflict
The Russian-Ukrainian conflict fully erupted on February 24, 2022. The outside world expected Russian funds to flow into cryptocurrencies like Bitcoin, causing Bitcoin's price to rise by 20%, briefly surpassing $45,000. At that moment, Russian oligarchs attempted to convert frozen assets via Bitcoin, seemingly affirming the "crisis value" of cryptocurrencies.
However, in the long term, when the war pushed European natural gas prices to historic levels and the Federal Reserve had to implement the most aggressive interest rate hike in forty years, Bitcoin experienced a 65% crash in 2022. While this decline cannot be solely attributed to the war, geopolitical uncertainty undoubtedly increased pessimism in the market.
Interestingly, the continuity of war provided a new narrative support for Bitcoin. The Ukrainian government raised millions of dollars in donations through cryptocurrencies, highlighting the unique value of digital currencies under limited traditional financial systems. At the same time, facing Western sanctions, Russia also somewhat turned to cryptocurrencies as a tool to circumvent sanctions, further enhancing Bitcoin's status as an alternative financial tool.
It is worth noting that in 2014, Bitcoin entered a long-term bear market following Russia's invasion of Ukraine. However, by 2022, Bitcoin evolved into a larger, stronger asset class that was more accepted by institutional investors.
The market test for the Israeli war
On October 7, 2023, the Israeli-Gaza conflict broke out. On October 11, according to data from bit,sCr,un,ch, Bitcoin fell below $27,000, marking its lowest level since September, as traders generally attributed this to the negative impact of the conflict in the Middle East on investor sentiment. During the 2023 Gaza conflict, USDT transfer volume increased by 440% weekly, as stablecoins became a new infrastructure.
Since the beginning of the conflict between Israel and Hamas, digital asset prices have not shown significant fluctuations. This relative stability reflects a decrease in the cryptocurrency market's sensitivity to geopolitical events.
The Iranian-Israeli conflict
During the Iranian-Israeli conflict in April 2024, on the day of the rocket attacks, Bitcoin's volatility was only ±3%, less than a third of the volatility during the Russian-Ukrainian war. The Blac,kRock ETF had a net inflow of $420 million in one day, forming a barrier to volatility. The daily trading volume of the Spot ETF was 55%, with war sentiments alleviated by the influx of institutional orders.
Data from bits,Crun,ch shows that even during major geopolitical events such as Israeli airstrikes on Iran, the Bitcoin market did not enter a panic state. Although Bitcoin fell by 4.5% to $104,343 and Ethereum dropped by 8.2% to $2,552 during the first 24 hours of the war in June 2025, these declines were still relatively manageable given the severity of the event, demonstrating strong resilience.
However, according to the Geopolitical Risk Index (GPR), we find that the index is currently trending upwards, around 158. The last time it exceeded 150 was in early 2024. This index was built by Dario Caldara and Matteo Iacoviello. The GPR peaked before and after the world wars, during the early stages of the Korean War, during the Cuban Missile Crisis, and after the "September 11" event. As geopolitical risks rise, investment, stock prices, and employment rates decline. High geopolitical risks increase the likelihood of economic disasters and negative risks to the global economy.
The best window to observe the logic of capital
The moment of signing a ceasefire agreement is often the best window to observe the logic of capital. In November 2020, when the Nagorno-Karabakh war ended, Bitcoin nearly doubled in the following 30 days. The main reason for igniting this regional conflict in a small Caucasian country for the cryptocurrency market is that the war did not change the resilient global policies, with the Federal Reserve's ongoing monthly bond-buying program of $120 billion continuing to irrigate risky assets. In contrast, in March 2022, during the Russian-Ukrainian negotiations, the short-lived hope for a ceasefire was crushed due to the Federal Reserve's expectation of a 50 basis point rate hike, causing Bitcoin to drop by 12%.
On the day of the temporary ceasefire between Israel and Palestine in November 2023, $210 million was liquidated in the cryptocurrency derivatives market. The exchange rate premium between Bitcoin and the Egyptian pound on the OTC exchange fell from 8.2% to 2.1%, with demand gradually declining in war-torn areas. Soon, ETF approval narratives and the classification cycle overshadowed the war narrative. On January 15, 2025, Israel and Hamas agreed to a ceasefire and prisoner exchange proposal. Thereafter, Bitcoin sharply rose, surpassing $100,000 again before declining. The market performance during the conflict in the Middle East prompted a reconsideration of Bitcoin's characteristics as a safe asset - Bitcoin and Ethereum can no longer be considered safe assets in the gold market.
Entering the institutional era
The wartime value of digital assets has not disappeared but is being rebuilt in scenarios. The Ukrainian government received $127 million in cryptocurrency donations, representing 6.5% of its early international aid; underground Gaza networks maintained communication networks through Bitcoin mining machines; Iranian oil traders used mixers to bypass sanctions... These real applications in marginal areas form a parallel ecosystem to the dark web. While mainstream markets focus on ETF fund flows, the demand for cryptocurrencies in war-torn areas has become a new indicator for monitoring digital assets.
The current cryptocurrency market has formed a clear response mechanism to war: oil prices that provoke
