Bitcoin surprises as oasis of calm while Iran war jolts markets
The cryptocurrency has gained nearly 14% since the conflict broke out
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[SINGAPORE] Cryptocurrencies have stood out as winners among asset classes since the outbreak of the war in Iran, but the resilience of digital assets may be a matter of timing.
Bitcoin, the largest token, and a cohort of smaller digital assets have been an oasis of calm, relative to the volatility in equities, gold and oil.
The original cryptocurrency pushed through a crucial psychological mark of US$75,000 on Tuesday (Mar 17) in Asia, taking its gains since the war started at the end of February to nearly 14 per cent.
This marks a sharp contrast to the spectacular crash in October 2025, when the value of Bitcoin halved from its high of more than US$126,000.
Yet, a tentative recovery that started in late February amid geopolitical uncertainty has picked up pace in March, as crypto traders poured back into exchange-traded funds (ETFs).
Rachael Lucas, an analyst at BTC Markets, said: “Bitcoin’s resilience here is less about narrative and more about mechanics. Institutional buyers, particularly corporate treasuries, are absorbing supply on every dip.”
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US-traded spot Bitcoin ETFs have seen roughly US$1.5 billion in inflows in March, based on data compiled by Bloomberg.
Markus Thielen, head of research at 10x Research, noted that the latest bullish signals in crypto markets appear to be partly driven by traders unwinding their options bets that Bitcoin would continue to fall below the US$55,000 to US$60,000 level.
As traders closed out their negative positions, Bitcoin rallied.
“The selling or closing of Bitcoin put options reduces downside hedging pressure, and forces market makers to buy BTC to rebalance their exposure, (therefore) creating supportive flows that can push prices higher,” Thielen wrote in a research note.
Data from the derivatives trading platform Deribit showed that about US$1.5 billion of Bitcoin puts are clustered around US$60,000, while there are US$1.3 billion of calls at US$75,000.
Bitcoin briefly plummeted after the US and Israel initiated a bombing campaign against Iran on Feb 28, falling as low as US$63,038. Hayden Hughes, managing partner at Tokenize Capital, said that the subsequent rally was “backed by genuine positioning”.
“What started as a structurally supported recovery has transitioned into a momentum trade, where the original edge holders have already taken profit,” he added.
Bitcoin continues to experience upside momentum. Perpetual futures for the cryptocurrency show a positive funding rate, which requires traders holding long positions to pay a fee to those who are short.
The current Coinbase premium on Bitcoin’s price also indicates strong demand in the US. Strategy Inc, which buys and holds Bitcoin, has recently purchased more of the crypto.
However, the underlying momentum is not yet “accompanied by significant upside call buying, suggesting that the move has so far been driven more by hedge unwinds than by aggressive bullish positioning”, Thielen wrote.
Tokenize Capital’s Hughes suggested that the current rally could soon reverse. While Bitcoin could touch US$80,000 in the short term, he said that the rally may fizzle out by April and worsen by August. BLOOMBERG
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