Geopolitical Powder Keg Reignited? Three Preparations Crypto Investors Must Make

“The US and Israel may restart military actions against Iran” — this news stands out sharply against the backdrop of a declining crypto market. On May 18, BTC dropped below 77k, with 150k traders liquidated. How much of this is an early reaction to geopolitical panic? As crypto investors, we can't predict when missiles will fall, but we can prepare the following three measures in advance.

First Preparation: Reassess Your Asset Correlation. Many believe Bitcoin is a “safe-haven asset,” but during the initial outbreak of real geopolitical conflict, Bitcoin often declines in tandem with US stocks because the market's first reaction is liquidity tightening and fear of the unknown. Only when the situation becomes clearer mid-term and central banks are forced to loosen monetary policy will Bitcoin demonstrate its “digital gold” properties. Therefore, if you are heavily leveraged, it’s recommended to immediately reduce leverage to below 2x or clear your leverage positions altogether.

Second Preparation: Build a “Crisis Hedge Portfolio.” No need for complex operations; the simplest approach is to allocate 5%-10% of your total investment into assets with low or negative correlation to the crypto market. For example, holding some stablecoins for interest via Gate.io’s financial products, or allocating a small amount to gold ETF tokenized products (like PAXG). These assets tend to perform steadily during geopolitical conflicts and can partially hedge against crypto portfolio declines.

Third Preparation: Set Up Scenario Response Plans. Think ahead: if Iran really goes to war, will your first reaction be to sell, buy, or wait? If it’s just threats and the market oscillates repeatedly, what should you do? My personal plan is: once military action is confirmed and BTC drops below $75k, I will use cash reserves to make “panic buys,” because such short-term drops are often quickly recovered. But if the conflict drags on, I will maintain a low position and wait for clearer macro signals.

Returning to the second discussion point: Is this a panic sell-off or a bottom-fishing opportunity? My view is that we are currently in a gray area between the two. Panic is real; liquidation data proves it. But opportunities also exist, provided you use the right tools and mindset. I wouldn’t recommend going all-in on bottom-fishing, but I also wouldn’t advise liquidating everything.

Specific actions: Maintain a 50% core position (spot BTC + ETH), 20% in DeFi/SocialFi strong tokens, and 30% in cash. Every time there’s a major escalation in geopolitical news, use 5% of cash to buy in. This way, regardless of how the situation unfolds, you have both offensive bullets and defensive shields.