BIT Research: As geopolitical conflicts escalate, why is Bitcoin starting to outperform traditional assets?

The current market is in a macro repricing phase dominated by geopolitical factors. The escalation of the situation related to Iran is increasing uncertainty regarding energy supply, inflation trajectories, and global growth prospects. Previously, the market was trading on expectations of looser policies, but as the risk of conflict spillover rises, the pace of interest rate cuts has begun to be reassessed, even gradually factoring in a more hawkish policy path.

From the current pricing perspective, the market still tends to view this round of shocks as a temporary inflation disturbance, with the implicit assumption that the impacts on energy and shipping are relatively controllable and will ease within a reasonable timeframe. However, as risks continue to accumulate, the interconnection between energy, interest rates, and risk appetite is strengthening, and the macro narrative is shifting from "short-term inflation shock" to "potential growth shock." In this process, Bitcoin's performance is beginning to show structural characteristics that differ from traditional assets.

Inflation Shock Dominates Pricing: Energy and Interest Rates Reshape Risk Asset Performance

In the first phase of this round of shocks, the core driver remains the inflation pressure brought about by rising oil prices. Higher Brent crude oil prices are pushing up inflation expectations and tightening financial conditions, which suppresses risk assets. In this phase, both stocks and Bitcoin find it difficult to completely avoid adjustment pressures.

However, compared to traditional risk assets, Bitcoin has a key difference: its price has already experienced a significant decline, and the potential passive selling pressure in the market is relatively limited. This "position advantage" allows it to exhibit stronger resilience under the same macro shocks. At the same time, in a high oil price environment, real interest rates remain elevated, increasing the opportunity cost of gold, while Bitcoin does not have the holding costs of physical assets, thus gradually gaining an advantage in relative comparisons.

As the shocks continue, the market may enter the second phase, transitioning from inflation concerns to growth concerns. Industrial commodities like copper are weakening, beginning to reflect suppressed demand, and global growth expectations are marginally weakening. In this phase, a purely inflationary logic will no longer suffice to explain market trends, and the macro pricing framework will begin to change.

From Growth Concerns to Policy Responses: Liquidity Expectations May Become a Key Variable

If the shocks continue, the market is likely to enter the third phase, which is the policy response phase. When growth pressures increase and financial conditions continue to tighten, policymakers often intervene through fiscal or monetary means, including price controls, subsidies, or broader liquidity releases.

The key change in this phase is that market pricing will shift from "inflation-dominated" to "liquidity expectation-dominated." Historical experience shows that in an environment where liquidity is being re-released, Bitcoin often benefits from its non-sovereign asset attributes, exhibiting greater resilience.

At the same time, the structure of global capital flows is also changing. Since the Russian central bank's reserves were frozen, market trust in the "neutrality" of reserve assets has been shaken, and resource-exporting countries are adjusting their asset allocation structure, gradually shifting from U.S. Treasuries and U.S. stocks to gold and other assets. This change compresses global liquidity space and raises long-term interest rates, complicating the macro environment further. In this context, Bitcoin's relative performance depends not only on risk appetite but is also closely related to its position in the liquidity cycle. Once the market begins to factor in expectations of policy easing, Bitcoin's relative advantage may be further strengthened.

Overall, the evolution path of this round of macro shocks is transitioning from "oil price-driven inflation shocks" to "growth shocks under energy constraints," and may ultimately enter a "liquidity phase dominated by policy interventions." In this process, traditional assets face dual pressures from interest rates and growth, while Bitcoin, having already undergone a certain degree of price adjustment and being more sensitive to liquidity, is demonstrating relative resilience.

For investors, the key at this stage is not the short-term volatility itself, but the identification of the phase switch in the macro narrative. Once the market shifts from an inflation logic to a liquidity logic, Bitcoin may transform from a passive pressured asset to a relative beneficiary in the new round of pricing.

The above views are partly derived from BIT on Target, contact us for the complete report of BIT on Target.

Disclaimer: The market has risks, and investments should be made cautiously. This article does not constitute investment advice. Trading in digital assets may carry significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided in this content.