Key Takeaways:
When conflict began with strikes on February 28, 2026, many expected cryptocurrencies to plummet. Surprisingly, Bitcoin didn’t fall; it actually increased in value. Gold, traditionally seen as a secure investment during crises, briefly rose to $5,600 before dropping to $4,150 quickly. The Nasdaq stock market initially crashed, but then recovered even faster than Bitcoin. These three investments reacted very differently to the same events, highlighting the unpredictable nature of markets during wartime.
The explanation starts four months before February 28.
Four cracks that opened before the first shot
In October 2025, Bitcoin reached a high of $126,100 on the Binance exchange. However, the price then began to fall, and many individual investors thought this was just a short-term dip. They were wrong, as four key factors were actually starting to fail simultaneously.
Trump’s announcements of new tariffs significantly impacted the overall economic outlook. His proposal to impose a 100% tax on goods from China, along with plans for similar measures against other countries, directly hurt investments considered risky. This pressure began to weaken the four key factors that had been driving the stock market’s gains in 2025.
As an investor, I’ve been watching things shift. With inflation and rising energy costs changing expectations for interest rates, easy money started drying up. I noticed institutional investors pulling back – the SoSoValue chart clearly showed ETF outflows increasing, and it seemed like everyone was building up cash instead of buying. It felt like the smart money was hitting pause, rather than doubling down.
Bitcoin’s claim as a secure investment was being seriously questioned as its value dropped during a period of economic difficulty, unlike what many expected. This caused investors to lose faith, and demand stalled, even without a large number of people trying to sell their Bitcoin.
Money gradually shifted away from cryptocurrencies and towards safer investments over several months, without any sudden, panicked selling.
By mid-February 2026, Bitcoin’s value had fallen by half from its highest point, settling around $63,000. This price drop happened before any military conflict began.
What the Nasdaq chart shows that the BTC chart alone doesn’t
Between June and November 2025, Bitcoin and the Nasdaq Composite stock market index moved very similarly, both increasing in value as there was plenty of money available and strong interest from institutional investors. However, in November, Bitcoin reached a high of $126,100 and then began to decline. The Nasdaq continued to rise and hit new highs through January 2026, while Bitcoin had already fallen 20% from its peak.
Bitcoin reacted to potential economic problems three to four months before the Nasdaq stock market did. Factors like trade tensions, changing interest rate expectations, and cautious investing from institutions first appeared as effects within the cryptocurrency market. This is because crypto markets are open 24/7 – unlike traditional markets with closing times and trading pauses. When large investors need to quickly raise money, Bitcoin is often the first asset they sell, at any time of day. This means price changes in Bitcoin, both up and down, tend to happen more quickly.
By March 2026, the stock market experienced a significant downturn, with the Nasdaq dropping from its January peak to around 21,000. This decline followed weeks after the initial impact of the war had already been felt in the cryptocurrency market. Bitcoin, which had previously reached a low of $63,000 in late February, managed to stabilize at that level, unlike the Nasdaq which continued to fall. Essentially, one asset had already hit its lowest point, while the other still had further to decline.
Starting in April, the Nasdaq stock market rose significantly, jumping from 21,000 to over 26,000 by May – a 24% increase from its lowest point in March. Bitcoin followed a similar trend, climbing from $63,000 to around $76,800, representing a roughly 20% gain from its lowest price.
This difference is significant. If Bitcoin was attracting new investment from people leaving traditional markets, it should have risen faster than the Nasdaq during the recent recovery. However, the Nasdaq’s quicker rebound suggests Bitcoin’s price increase was mainly due to the market stabilizing – getting rid of risky positions, weaker investors selling, and those who held on not selling further – rather than a surge of new buyers seeking a safe haven.
The floor that never broke
As of February 28th, the total value of all cryptocurrencies was around $2.16 trillion. Despite increasing global tensions – including a blockade of the Strait of Hormuz and oil prices exceeding $100 a barrel – the market capitalization remained above $2.20 trillion in the following weeks. Currently, it’s around $2.53 trillion, slightly down from $2.7 trillion just a few days ago, based on data from TradingView.
Typically, when markets face serious problems, prices fall to new lows. However, that didn’t happen in this case. Although a brief ceasefire was announced on April 8th, it was quickly doubted and retracted by both sides. Surprisingly, the price of crypto didn’t change much, even when the ceasefire failed. It seems the market had already anticipated the worst possible outcome.
Looking at why the recent low held, it really comes down to that 50% correction we saw. The drop from around $126,100 to $63,000 really shook things up, forcing a lot of leveraged traders to close their positions. What I observed is that most panic selling happened *during* the decline, not right at the very bottom. By the time Bitcoin hit $63,000, the remaining holders were those who were already comfortable with a lower price point. Essentially, there was no one left who could be frightened into selling, which provided a natural floor.
Why gold crashed while Bitcoin held its floor
Heading into 2026, gold had already benefited significantly from rising global tensions. Unlike Bitcoin, which started to decline in October, investors moved their money *into* gold as they became more cautious. This drove the price of gold up quickly, from about $4,500 to almost $5,600 in just a few weeks – a gain of around 25%. By the time war broke out, gold wasn’t an undervalued asset; it had already reached a record high and many investors had seen substantial profits.
Then it crashed to $4,150, according to GoldPrice data.
When stock markets crash due to war, big investors often get urgent requests for money from their brokers. This forces them to sell assets quickly, not necessarily the ones they *want* to sell, but the ones they can sell for a profit. Gold proved to be a good option because it was easy to sell, had a ready market, and provided a quick source of cash when it was desperately needed. This selling wasn’t based on any negative feelings about gold itself; it was simply a reaction to the immediate need for funds.
Bitcoin had already been sold off, and any profits had disappeared. All leveraged positions had been closed. Unlike with gold, where institutional selling caused prices to fall, there wasn’t much activity to drive crypto prices further down.
Gold has bounced back to around $4,526 currently, though it’s still about 20% below its highest price. Bitcoin is at $76,800, roughly 21% higher than its lowest point during the recent conflict. Since the conflict began, Bitcoin has actually performed better than gold. This wasn’t due to investors seeking a safe place for their money, but rather because Bitcoin had already hit its lowest point and had nowhere else to fall.
The Ukraine parallel from 2022
A similar pattern happened when Russia invaded Ukraine on February 24, 2022. Bitcoin’s price initially fell sharply by 8% to $34,000 as people quickly sold it for cash. However, it rebounded strongly within a week, gaining over 20% to reach $45,000. This recovery was partly due to technical factors, but also because people in Ukraine and Russia, who were blocked from traditional banking, used Bitcoin to transfer money internationally, relying only on the security of their private keys.
Gold prices jumped above $1,970 when the invasion began. However, as central banks raised interest rates to combat the resulting inflation, gold’s price declined for the remainder of the year. By fall 2022, it had dropped more than 15% from its peak, settling around $1,620.
Whether it’s been four years or any amount of time, the factors influencing market behavior remain consistent. These include which party has the most power in a negotiation, what expectations are already built into prices, and where an asset stands in its natural growth and decline pattern when unexpected events occur.
The ceiling that’s still there
Bitcoin has genuinely recovered, climbing from $63,000 to $76,800. However, this is happening while the global economic situation remains unstable. High oil prices, staying above $100, are fueling inflation fears and pushing back expectations for interest rate cuts. This limits the willingness to invest in riskier assets like cryptocurrency, hindering a full market recovery. The biggest concern right now is the situation in the Strait of Hormuz. As long as it remains a threat, energy prices and inflation will stay unpredictable, and the positive economic conditions needed to attract more investment into crypto won’t materialize. To make matters worse, the dollar is getting stronger, adding further downward pressure.
As a crypto investor, I’ve noticed the recent rebound has been consistent – it feels like we hit a strong bottom. But honestly, it’s been a bit of a slow climb back up, and I think that’s because there’s a legitimate resistance level we’re approaching. It’s not just hype driving things; there’s a real ceiling to how high we can go right now.
What the data actually says
It’s hard to say definitively whether Bitcoin’s price increase was due to investors seeking a safe place for their money, or simply a rebound after a previous drop. Both factors played a role, but one was more significant than the other.
When the conflict began, people quickly sold their Bitcoin for cash. Because Bitcoin is always available, it was used for this purpose immediately. The price didn’t stabilize because of new buyers, but because those who wanted to sell had already done so. After that, the price recovered for two main reasons: the natural rebound after a 50% drop, and the continued appeal of Bitcoin as a limited-supply asset, especially with governments increasing spending due to the war. Buyers of Bitcoin ETFs entered the market around $63,000, seeing it as a good long-term investment rather than a temporary dip.
Although both Nasdaq and Bitcoin increased in value – Nasdaq by 24% and Bitcoin by 20% – Nasdaq’s stronger performance indicates it was the primary driver of recent gains. Typically, assets seen as safe havens outperform stocks during uncertain times, but that wasn’t the case here. The recent market correction seems to better explain what happened.
The money didn’t leave. It stopped.
Prior to the conflict between Iran and the US, four key factors supporting the market were weakening: expectations of plentiful money, demand from institutional investors, the idea of the market as a safe place to invest, and overall investor confidence. However, none of these factors completely failed. Institutions shifted their money to cash and adopted a wait-and-see approach. The market’s total value decreased, but didn’t fall apart. The conflict entered a market that was already slowing down, and that slow pace continued.
Markets can’t stay uncertain forever. Eventually, something will change – whether it’s the Strait of Hormuz becoming accessible again, the conflict easing, expectations about interest rates adjusting, or large investors finding a reason to act. When that happens, the market reaction won’t just be about the news itself. It will also depend on how much money has been held back, waiting for the right moment to invest.
If investments held steady over the last three months instead of decreasing, even a small event could be enough to restart growth.
Perhaps Bitcoin didn’t endure because of its strength, but rather because it had already gone through its weakest period by February 28th.
This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. It’s crucial to do your own research and talk to a qualified financial advisor before making any investment choices.
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2026-05-26 14:11