On 22 Jun 2025, the US bombed nuclear facilities in Iran. At the time, Sandmark noted that Bitcoin’s performance following major geopolitical shocks over the past decade showed no consistent directional pattern. With the latest escalation involving US and Israeli strikes on Iran in February 2026, it is worth revisiting that observation.
Bitcoin and Geopolitical Shocks: Revisiting the Data
10 March 2026 - 10:35 CET
Looking at major geopolitical events since 2020, Bitcoin’s reaction remains inconsistent.
While the average 90-day return following these shocks is +11%, outcomes vary widely. Some events preceded large rallies, while others coincided with sharp drawdowns. The pattern is straightforward: geopolitical shocks tend to increase volatility, but they have not historically provided a reliable signal for Bitcoin’s direction.
(Source: TradingView)
Oil shock vs Bitcoin and gold
While Bitcoin’s reaction has historically been mixed, the latest escalation produced a much clearer signal in energy markets. When futures reopened at 22:00 UTC on Sunday, 8 Mar, markets reacted very differently across assets. Oil opened at $98 and closed the first hour at $106.93, a 9.1% jump, eventually reaching gains of around 18% in the following hours.
Gold and Bitcoin were far calmer. Gold opened at $5,180 and traded 2.5% lower during the session, while Bitcoin slipped from $67,003 to $66,235 in the first hour, a 1.1% decline, before gradually recovering and briefly turning positive a few hours later.
The divergence suggests the market interpreted the escalation primarily as an energy supply shock rather than a broad flight into alternative stores of value. Oil repriced the risk of disruption in Middle Eastern production and shipping routes, while gold and Bitcoin showed only limited follow-through.
Chart
An idiosyncratic oil supply shock
Market pricing suggests traders interpreted the escalation primarily as an oil supply shock, rather than a generalized financial panic. Two risks drove the repricing:
1. Strait of Hormuz disruption: More than 20% of global oil flows pass through the Strait of Hormuz, making it one of the most critical energy chokepoints in the world.
2. Regional production disruptions: Reports also pointed to severe supply interruptions across the region. In Iraq, production from southern oilfields reportedly fell to 1.3mn barrels per day from roughly 4.3mn bpd, according to industry sources.
Notably, the amount of crude production reportedly shut in exceeded the peak supply loss markets feared, but never actually saw, during the early stages of the Russia-Ukraine war, when oil briefly surged above $120 per barrel. In other words, the oil market was reacting to immediate physical supply risks.
What this means for Bitcoin
For Bitcoin, the episode reinforces a pattern seen repeatedly over the past decade. Geopolitical shocks can increase volatility, but they rarely dictate Bitcoin’s medium-term direction.
The contrast with oil is instructive. Commodities react immediately to physical supply shocks, while Bitcoin remains primarily a financial asset shaped by global capital flows rather than geopolitical headlines. Viewed through that lens, the historical data show little consistent relationship between geopolitical conflict and Bitcoin’s price trajectory.
