Guess What Asset Has Performed Well During the War in Iran? Believe It or Not—It’s Bitcoin

Key Takeaways

• The price of bitcoin has risen about 10% since the initial attacks on Iran, outpacing gold, the U.S. dollar, the S&P 500, and the leading U.S. indexes.
• Academic studies show that the cryptocurrency doesn’t consistently behave as a haven asset relative to gold—but it can.

Bitcoin appear to be doing what other haven assets haven’t lately.

The cryptocurrency has risen about 10% to above $72,000, since the initial strikes on Iran, outpacing the U.S. dollar and gold as well as major broad market indexes. That performance might not impress those who recall when its price could move that much in a day, but the moves nevertheless—in the short term, anyway—have it looking like a decent shelter as war in the Middle East has driven oil prices higher and led to wild swings in stocks.

Bitcoin hasn’t always proven to be an effective hedge. Before the recently onset of what some called crypto winter, it was behaving more like a risk asset that tends to track technology stocks. Many market experts still poo-poo the digital asset’s use as a portfolio hedge as effective as gold, but investors appear to be wading back into crypto in recent days amid increased uncertainty about the path forward for war.

WHY THIS MATTERS TO YOU

While bitcoin hasn’t always proven to be a safe haven asset in times of geopolitical crises, in some instances, it has shown stability. That’s been the case lately, too, since the start of the fighting in Iran.

When events are at their most unsettled, said Ray Dalio, founder of hedge fund Bridgewater Associates, on a podcast last week, “gold does well and the other things don’t—generally speaking.” Dalio said investors should generally have between 5% and 15% in their portfolio in gold for diversification purposes.

Why isn’t bitcoin a safe-haven asset? In a nutshell, Dalio said: “Central banks are not going to want to buy bitcoin.” Gold, meanwhile, has taken a larger share of central bank reserves in the past year, driving what is called the “debasement trade.”

Yet since the first strikes on Iran, net flows into bitcoin funds including iShares Bitcoin Trust (IBTC) and the Fidelity Wise Origin Bitcoin Fund (FBTC) were positive, totaling over $1.1 billion according to data compiled by Farside Investors.

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This isn’t inconsistent with other recent activity. An academic study published last year showed that trading volumes in the cryptocurrency tend to rise during geopolitical crises; it also studied bitcoin’s performance against safe-haven assets and both U.S. and international stocks, over the COVID-19 pandemic, the Russia–Ukraine war, and the Israel–Palestine conflict, finding that while bitcoin didn’t consistently provide price protection it showed “remarkable stability.”

“Bitcoin is neither a pure safe haven nor a speculative anomaly—it occupies a flexible, contingent position that may shift based on crisis characteristics, investor sentiment, and geographic context,” the authors, including Antonis Ballis, and Ariston Karagiorgis wrote.

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