The Impact of War on Bitcoin: A Five-Year Price Movement Analysis

In recent years, there have been multiple major geopolitical conflicts globally, which have had varying degrees of impact on the cryptocurrency market. This article will delve into the effects of major war events on Bitcoin price movement from 2020 to 2025, as well as the recovery of the crypto market after the conflicts have ended.

Russia-Ukraine Conflict: A Watershed Moment for Market Volatility

On February 24, 2022, the Russia-Ukraine conflict fully erupted. In the early stages of the conflict, the price of Bitcoin briefly rose by 20%, once breaking through $45,000. This is considered a result of Russian capital seeking a safe haven. However, in the long term, the war pushed up energy prices in Europe, and the Federal Reserve was forced to aggressively raise interest rates, resulting in a 65% drop in Bitcoin in 2022.

It is worth noting that this conflict has provided new application scenarios for Bitcoin. The Ukrainian government has raised millions of dollars in donations through cryptocurrencies, highlighting the unique value of digital currencies in situations where traditional finance is restricted. At the same time, Russia has also utilized cryptocurrencies to some extent to circumvent Western sanctions, further reinforcing Bitcoin's status as an alternative financial tool.

Israel-Gaza Conflict: A Test of Market Resilience

On October 7, 2023, the Israel-Gaza conflict broke out. In the early stages of the conflict, Bitcoin fell below 27,000 USD, marking a new low since September. However, the overall cryptocurrency market demonstrated strong resilience, with relatively limited price movement. This reflects a reduced sensitivity of the crypto market to geopolitical events.

It is worth noting that during the conflict, the weekly transfer volume of USDT increased by 440%, indicating that stablecoins are becoming a new infrastructure.

Iran-Israel Standoff: The Buffer Role of Institutional Funds

In April 2024, a conflict broke out between Iran and Israel. On the day of the missile attack, Bitcoin price movement was only ±3%, far lower than the levels during the Russia-Ukraine war in 2022. This was mainly due to the buffering effect of institutional funds, with the average daily trading volume of spot ETFs accounting for 55%, effectively diluting the impact of war sentiment.

In June 2025, Israel launched an airstrike against Iran. Despite the seriousness of the situation, Bitcoin only dropped 4.5% to $104,343 within 24 hours, while Ethereum fell by 8.2% to $2,552. This relatively manageable decline once again demonstrated the resilience of the cryptocurrency market.

However, geopolitical risks ( GPR ) index is showing an upward trend, around 158. This indicates that the global economy may face greater downward risks.

Ceasefire Moment: An Observation Window of Capital Logic

History shows that the signing of ceasefire agreements is often the best time to observe capital logic. For example, after the Nagorno-Karabakh war ended in November 2020, Bitcoin's price nearly doubled within 30 days. This was mainly because the war did not change the global accommodative monetary policy tone.

In contrast, during the Russia-Ukraine negotiations in March 2022, the expectation of interest rate hikes by the Federal Reserve shattered the brief hope for a ceasefire, causing Bitcoin to drop by 12%. On the day of the temporary ceasefire between Israel and Palestine in November 2023, the cryptocurrency derivatives market experienced a liquidation of $210 million, and the premium of BTC against the Egyptian pound in the OTC market significantly decreased.

On January 15, 2025, Israel and Hamas agreed to a ceasefire, and Bitcoin subsequently broke through $100,000 before retreating. This series of events prompted the market to reassess Bitcoin's safe-haven properties.

The War of Cryptocurrency Value Reconstruction

Although Bitcoin has not yet become a traditional safe-haven asset like gold, its value is being restructured in special scenarios. For example, the $127 million in crypto donations received by the Ukrainian government accounted for 6.5% of its early international aid; the Gaza Strip is using Bitcoin mining machines to maintain communication networks; Iranian oil dealers are circumventing sanctions through mixers, etc. These marginal applications are forming an ecosystem parallel to the mainstream market.

Currently, the crypto market has formed a relatively clear war response mechanism, including monitoring indicators such as crude oil prices, the VIX panic index, and open interest in options. Data shows that less than 5% of safe-haven funds triggered by geopolitical conflicts have flowed into the crypto space, and this proportion may further decrease in the ETF era.

Monetary Policy: A Key Factor in Market Direction

The core factor that truly influences the direction of the cryptocurrency market is still monetary policy. When the Federal Reserve begins to lower interest rates, the signing of a ceasefire agreement may become a catalyst for capital inflow. On June 18, 2025, U.S. interest rate futures show a 71% probability of a rate cut in September. However, if war leads to a disruption in the energy supply chain, even if the conflict settles, the risk of stagflation may still suppress the performance of the cryptocurrency market.

Post-war Recovery Model and Future Outlook

Historical experience shows that the end of conflicts usually brings a gradual recovery of market confidence. The advancement of the peace process helps reduce geopolitical risk premiums and enhances investors' risk appetite, which often benefits risk assets like Bitcoin.

If Bitcoin demonstrates good risk resistance during wartime, it may attract more institutional investors to increase their holdings. Conversely, poor performance may face pressure from capital outflows. Recently, Bitcoin's relative stability amid geopolitical crises is expected to enhance its position in the eyes of institutional investors.

Looking ahead, with technological advancements and improved regulation, cryptocurrencies such as Bitcoin are expected to play a more significant role in the global financial system. Although faced with numerous challenges in the short term, their status as important financial tools in the digital age has been initially established. In this era of uncertainty, crypto assets are redefining people's understanding of currency, value storage, and financial systems. Although the path of development is tortuous, the historical significance and potential value of this transformation cannot be ignored.