Bitcoin Rebounds After US-Iran Conflict, Serves as Weekend Liquidity Anchor
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Cliff-Notes:
- Bitcoin dropped 4.5% during the US-Iran escalation while markets were closed, but has rebounded to $105,000 in just over 24 hours.
- Its weekend performance highlights bitcoin’s growing role as the world’s only round-the-clock liquidity release valve during global stress.
- Over time, these small episodes accumulate, documenting the multi-decade shift in bitcoin from a risk-on asset to the apex monetary benchmark.
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On Saturday night, the United States launched airstrikes on Iranian nuclear infrastructure. The move was fast and deliberate, and the world’s markets weren’t awake for it. That is, except for bitcoin, which never closes, and was the only asset offering liquidity, real-time pricing, and tradable exposure. And in the immediate aftermath of the strike, bitcoin actually climbed. Up 2.5% from $101,000 to over $103,000, while every other market on the planet slept.
The first twelve hours told the story of strength. Despite the geopolitical magnitude of the moment, bitcoin traded orderly, rising in value and holding that bid well into Sunday morning. But when Iran issued its response, threatening retaliation and bringing the prospect of escalation into focus, bitcoin sold off. Again, not because it was weak, but because it was the only spigot open for risk management. The only asset on the planet that could be sold to generate liquidity in real time was bitcoin, and it fell a modest 4.5%, bottoming near $98,000.
That low didn’t last long. By the time Asia was preparing to open, and before any legacy market had the chance to price in the weekend’s events, bitcoin had fully recovered. Within 18 hours of the drawdown, it reclaimed $102,000, erasing its decline. After another brief dip on Monday morning when Iran launched an attack on a US base in Qatar, Trump announced that the US had no intention of striking back, and bitcoin rebounded once again to $105,000. Far from its past crisis behavior of a fragile high-beta asset, bitcoin increasingly showcased the behavior of a resilient, liquid benchmark in a world starving for 24/7 price discovery. And when talks for peace took the conflict's place, bitcoin went back to doing what it does:
Look closer at what drove the move lower on Sunday. Over $208 million worth of BTC longs were liquidated in the perpetual futures market during the 12-hour down leg yesterday morning into yesterday evening:
Shorts spiked dramatically, outnumbering longs by 3.5 to 1 as traders reacted to headlines and chased momentum lower. But the cascade didn’t last. The entire flush was absorbed in less than a day, and bitcoin’s price bounced with conviction. That is a critical tell. Because in a true high-beta panic, such as March 2020, sellers don’t run out that quickly. This was not risk-off selling; it was liquidity-driven repositioning, and bitcoin was the only large enough market to do it over the weekend. This is evidenced by the fact that both US Treasuries, the world's foremost safe-haven bid, and bitcoin, a high-beta risk asset, are up on the day.
And it’s not the first time we’ve seen this pattern. Bitcoin was the first asset to sell off during the COVID crash in March 2020. But it was also the first to recover. When Silicon Valley Bank imploded in 2023 and regional banking contagion spread across the United States, bitcoin took a hit; but again, it rebounded first. In each case, bitcoin behaved as the fire escape. When market participants needed a fast exit and couldn’t find liquidity anywhere else, they turned to the only asset that was open, deep, and tradable at all hours.
What this weekend showed us is that dynamic is still firmly in place. But more importantly, bitcoin is becoming more effective in that role. The amplitude of the drawdown was smaller, the recovery was faster, and the confidence in its ability to shoulder global stress was higher. And this happened not while bitcoin was a fringe curiosity, but while it sat as the 8th-largest, now the 6th-largest, asset in the world.
With a $2 trillion market cap, bitcoin is now larger than Google, Meta, and Saudi Aramco. It’s neck and neck with silver. And yet, despite this enormous scale, it still operates outside the confines of legacy market hours, central bank calendars, and fiat gatekeepers. While at face value, bitcoin trades as a speculative playground of tech-forward hobbyists, under the surface, bitcoin is slowly but surely morphing into a sovereign-grade, open monetary system with round-the-clock uptime and global reach.
That global reach matters, especially in wartime. The comparison that stands out most is what happened after the US invaded Iraq in March 2003. Take a look at this table from Alex Thorn at Galaxy Research. At the onset of the conflict, markets across the board sold off. But as the war dragged on and the government's response ballooned in size and cost, gold surged. One year into the conflict, gold had appreciated 25.58%, outpacing the S&P 500. Because all wars are inflationary. They demand money creation, deficit expansion, and policy flexibility that debases the purchasing power of fiat currencies. This is a glimpse at how bitcoin would outshine all else during wartime if the US had boots on the ground anywhere:
That same process is already underway today, even if a direct hot war with Iran is now off the table for the US. Fiscal deficits are now baseline policy rather than wartime exceptions. The global economy is caught between slowing growth, rising conflict risk, and untenable debt loads. And within this increasingly fragile framework, bitcoin is thriving. It is becoming the most direct expression of monetary degradation and geopolitical risk rolled into one instrument.
This past weekend wasn’t about whether bitcoin could “handle the volatility.” It was about whether bitcoin would continue evolving into the asset that its monetary properties have always destined it to trade as. The early signs say yes. It processed the geopolitical shock positively, it then served as a liquidity release valve for participants across time zones, and it exited the weekend (if you count Monday) stronger than it entered once geopolitical tensions cooled.
If you zoom in on the one-minute chart, the story looks chaotic. But zoom out, and it becomes obvious. Bitcoin's monetary evolution isn’t going to arrive in a single moment. It arrives in inches. One millimeter at a time. A new cohort enters. A hedge fund adds a sleeve. A corporate treasurer gets permission to allocate. A family office sells its gold ETF and buys a spot bitcoin ETF. These are the changes that don’t look like much on the day, but over the years, they compound.
Eventually, those inches add up. And what bitcoin is becoming isn’t just a hedge or a store of value; it’s becoming the global benchmark for everything. The apex risk-off asset. One you want to hold not just in times of stress, but in times of calm. Not just to speculate on upside, but to denominate your life in something that doesn’t lose its value with every dollar the government spends into existence.
Bitcoin won’t get there in a quarter, or even in a cycle, but this weekend’s activity documents bitcoin's move a few more millimeters closer to that eventual role. The role of being the bedrock monetary asset in a world that has forgotten the definition of fiscal austerity. It may take decades, but you’ll want to be holding the asset that gets stronger each time the world falls apart.
That said, the summer may not be smooth sailing for bitcoin. While the weekend’s rebound was strong, it still fits within the broader downtrend that’s defined price action since the May all-time high. Bitcoin continues to trade within a well-defined descending channel, and until it breaks above the upper boundary of that structure with volume and conviction, bulls are swimming upstream:
Sell in May and go away has been a popular axiom in traditional markets for decades. With bitcoin being larger than ever, and its owners having a larger institutional makeup than ever before, are we in for a choppy, boring summer for bitcoin price action, not unlike last summer? We'll have to wait and see.
Take it easy,
Joe Consorti
Theya is the simplest way to take full control of your bitcoin. With our flexible multi-sig vaults, you decide how to secure your keys.
Whether you prefer keeping all keys offline, shared custody with trusted contacts, or robust mobile vaults across multiple devices, it's always Your Keys, Your Bitcoin.