Bitcoin (BTC USD) or gold: Which safe haven asset did traders choose during the US-Iran conflict?

Bitcoin (BTC USD) vs gold as safe haven: Markets are still trying to make sense of how digital assets and traditional safe-haven plays are behaving during geopolitical shocks after the US, Israel, and Iran conflict triggered one of the most significant market jolts since 2022, as per an analysis from Capital.com, reported Benzinga.

Markets Recover After Strait of Hormuz Shipping Reopens

Following the initial escalation, markets are now recovering after Iran declared the Strait of Hormuz open to shipping amid the US-brokered ceasefire between Israel and Hezbollah in Lebanon, as per the report.

Traders Shifted to Oil Instead of Bitcoin (BTC USD) During Geopolitical Panic

Capital.com noted that retail traders did not immediately move into Bitcoin during the uncertainty. Instead, trading activity rotated heavily into oil, even as Bitcoin itself later rebounded nearly 20% from its post-strike lows.

Bitcoin USD Participation Drops as Gold Maintains Safe-Haven Status

Platform data showed Bitcoin participation actually dropped 9% below pre-conflict levels, while gold maintained its position as the traditional crisis hedge. Oil saw the strongest response, with unique traders rising 328% and trading volumes increasing 1,042% compared to pre-conflict averages.

$128 Billion Wiped From Crypto Markets in Initial Shock

Capital.com found that, “When US and Israeli strikes hit Iran on the evening of 28 February, Bitcoin's immediate market reaction left little ambiguity. Within hours, over $128 billion in crypto market capitalisation was erased. Bitcoin fell from approximately $66,000 toward $63,000. Gold rose,” as quoted by Benzinga.

Institutional Influence Makes Bitcoin More Sensitive to Risk-Off Moves

The firm suggested this reaction reflects Bitcoin’s increasing institutional participation, which has made it more sensitive to “risk-off” moves that typically affect equities during geopolitical stress.

BTC USD Still Outperforms Equities Over Full Conflict Period

However, Bitcoin later recovered and moved higher over the full conflict period, outperforming equities and supported by renewed discussion around its role as an alternative financial system. Capital.com also cited reports that said Iran demanded Bitcoin for certain payments during the Strait of Hormuz closures, saying that it is an example of “its use as an alternative payment system,” as quoted by Benzinga.

Analysts Say Bitcoin Faces Conflicting Market Forces

Senior Market Analyst Kyle Rodda pointed out that latest movements shows that Bitcoin remains exposed to “significant cross currents,” with inflation, sanctions and risk sentiment pulling it in different directions, and added that “The safe-haven debate has a new data point — and neither side wins cleanly,” as quoted by Benzinga.

FAQs

Did investors move into Bitcoin during the crisis?

No, retail traders mainly moved into oil instead.

How did gold perform during the shock?

Gold held its position as a traditional safe-haven asset and rose.