War and Bitcoin: In-depth Analysis of Price Trajectory Over Five Years

In recent years, the global geopolitical situation has been turbulent, with multiple wars and conflicts breaking out one after another. As an emerging financial asset, Bitcoin has shown a unique price trend during these events. This article will analyze in depth the impact of major wars and conflicts on Bitcoin prices over the past five years, as well as the recovery trajectory of the cryptocurrency market post-conflict.

Russia-Ukraine Conflict: A Watershed Moment

Market fluctuations at the beginning of the war

On February 24, 2022, the Russia-Ukraine conflict fully erupted. The market speculated that Russian funds might flow into cryptocurrencies, and the price of Bitcoin surged by 20%, breaking through $45,000. However, with European natural gas prices soaring and the Federal Reserve's aggressive interest rate hikes, Bitcoin experienced a significant drop of 65% in 2022.

It is worth noting that the ongoing war has provided a new narrative support for Bitcoin. The Ukrainian government raised millions of dollars in donations through cryptocurrency, highlighting the unique value of digital currency in special circumstances. At the same time, Russia has turned to cryptocurrency to some extent as a tool to counter sanctions, further strengthening Bitcoin's position as an alternative financial instrument.

Compared to 2014, Bitcoin in 2022 has evolved into a larger, stronger asset class that is more accepted by institutional investors.

Israel-Gaza Conflict: A Test of Market Resilience

On October 7, 2023, the Israel-Gaza conflict broke out. On October 11, Bitcoin fell below $27,000, hitting a new low since September. However, overall, the prices of digital assets did not show significant fluctuations, reflecting a reduced sensitivity of the cryptocurrency market to geopolitical events.

Iran-Israel Conflict: Institutionalized Buffer

During the Iran-Israel conflict in April 2024, the volatility of Bitcoin was only 1/3 of that during the outbreak of the Russia-Ukraine war. The introduction of spot ETFs created a volatility buffer, and the war sentiment was diluted by institutional order flows.

After Israel launched airstrikes on Iran in June 2025, Bitcoin fell by 4.5% to $104,343 within 24 hours, while Ethereum dropped by 8.2% to $2,552. This relatively controlled decline demonstrates the resilience of the market.

However, the geopolitical risk ( GPR ) index shows an upward trend, approximately 158. Historical data indicates that the higher the geopolitical risk, the greater the risk of a global economic downturn.

Ceasefire Moment: An Observational Window of Capital Logic

The signing of a ceasefire agreement is often the best time to observe capital logic. For example, after the end of the Nagorno-Karabakh war in November 2020, Bitcoin nearly doubled in 30 days. In contrast, during the Russia-Ukraine negotiations in March 2022, the expectation of interest rate hikes by the Federal Reserve led to a 12% drop in Bitcoin.

On the day of the temporary ceasefire between Israel and Palestine in November 2023, the crypto derivatives market faced a liquidation of $210 million. After Israel and Hamas reached a ceasefire agreement on January 15, 2025, Bitcoin briefly surpassed $100,000. These events prompted people to re-evaluate the safe-haven asset attributes of Bitcoin.

Entering the Institutional Era

The war value of digital assets is being scenically reconstructed. The cryptocurrency donations received by the Ukrainian government account for 6.5% of its early international aid; the underground network in Gaza maintains communication through Bitcoin mining machines; Iranian oil merchants use mixers to break through sanctions. These marginal applications are forming an ecosystem parallel to the mainstream market.

The current cryptocurrency market has established a clear war response mechanism, including indicators such as crude oil prices, the VIX panic index, and open interest. However, less than 5% of the safe-haven funds released by geopolitical conflicts are flowing into the cryptocurrency space, and this number may further shrink in the ETF era.

The real turning point lies in monetary policy. When the Federal Reserve opens the rate cut channel, the ceasefire agreement will become an accelerator for capital inflow. On June 18, 2025, U.S. interest rate futures indicated a 71% probability of a rate cut in September. However, if the war causes a disruption in the energy supply chain, even if the conflict subsides, the shadow of stagflation will still suppress the cryptocurrency market.

Post-war Cryptocurrency Market Recovery Model

From the perspective of concluded conflicts, the advancement of the peace process typically reduces geopolitical risk premiums, benefiting the performance of risk assets such as Bitcoin. If Bitcoin demonstrates good risk resistance during wartime, it may attract more institutional investors.

Conclusion

Looking ahead, with technological advancements and improved regulations, cryptocurrencies such as Bitcoin are expected to play a more important role in the global financial system. Although they still face challenges and volatility in the short term, their position as significant financial tools in the digital age has already begun to take shape.

In this era full of uncertainty, digital assets like Bitcoin are redefining our understanding of currency, value storage, and financial systems. Despite the challenges ahead, the historical significance and potential value of this transformation cannot be ignored.