Friends, the global focus has been drawn to the situation in the Middle East these days, right? The conflict between Israel and Iran has directly ignited the 'war mode' in the cryptocurrency market, with Bitcoin plunging from $112,000 to $98,000, and then violently rebounding to $106,000 after the ceasefire agreement, it can be called the crypto version of 'Fast and Furious'! Today, let's review this thrilling market battle.
1. Panic Selling vs. Institutional Bottom Fishing
On the first day of the conflict, the entire network saw liquidations totaling $1.015 billion, with 243,000 investors wiped out, and the long positions accounting for up to 89%. But dramatically, BlackRock's Bitcoin ETF attracted $560 million in investment against the trend, creating a 'death spiral' between institutional funds and retail investor liquidations. This torn market sentiment is a typical reaction of cryptocurrencies in crises—short-term panic coexists with long-term value.
2. The Chain Reaction of Crude Oil - Inflation - Monetary Policy
Iran threatens to block the Strait of Hormuz, jeopardizing 20% of global oil supply, causing oil prices to surge to $120 per barrel. Renewed inflation fears have cooled expectations for the Federal Reserve to cut interest rates, putting Bitcoin at the forefront as a high-risk asset. But oddly, when the market realized that the war did not trigger a global economic disaster, funds quickly flowed back into the crypto market, resulting in a V-shaped reversal.
3. The Underlying Narrative of the On-Chain War
Iran's largest exchange, Nobitex, suffered a $90 million loss due to a hacker attack, which made the market realize that when traditional financial infrastructure collapses, Bitcoin mining machines can transform into distributed communication nodes, supporting economic activities in war-torn areas. This suddenly materialized Bitcoin's 'war value', reminiscent of Ukraine raising $127 million in aid through cryptocurrency.
2. Understanding the Underlying Logic of the Crypto Market Through War
1. Bitcoin's Safe-Haven Properties Are Tested Again
In this conflict, Bitcoin's volatility was only ±3%, far lower than the 10% during the 2022 Russia-Ukraine war. The involvement of institutional investors (such as Texas government's $10 million Bitcoin reserve) is diluting the impact of war sentiment, and Bitcoin is evolving from a 'speculative asset' to 'digital gold.'
2. Stablecoins Become the Lifeline of Liquidity in Wartime
During the war, the weekly transfer volume of USDT surged by 440%, as Iranian citizens used P2P platforms to exchange stablecoins at a premium to evade sanctions. This reminds us that in extreme market conditions, stablecoins resemble 'digital cash' more than Bitcoin, and it is advisable to allocate 10%-20% of your holdings in USDT as emergency funds.
This indicates that the short-term shocks of geopolitical events will eventually be absorbed by the market, and the long-term trend depends on supply-demand structures and institutional capital movements. The supply contraction effect after the halving in 2024 is still at play, and the continued accumulation by institutions such as the Texas government is building a solid foundation for Bitcoin.
💡 Finally, let's emphasize: In this era full of uncertainty, cryptocurrencies are both risk assets and 'digital arks' in chaotic times. Learning to find opportunities in panic and maintaining clarity in greed is essential to steadily navigate the turbulent waters of the crypto market!
