#我的Gate交易时刻 Why Did Cryptocurrency Prices Rise After US-Israel Conflicts (Theoretical Analysis)

Since the US-Iran conflict, the Middle East situation has been fluctuating and continues to this day, causing significant impacts on global energy supply, supply chain patterns, and capital markets. In this event, cryptocurrencies represented by Bitcoin in the local area have shown signs of price increases, rising demand, and cross-border outflows, once again sparking debates and reflections on whether cryptocurrencies are "digital gold." What role did cryptocurrencies play amid the US-Iran war and the joint US-Israel attack on Iran?
Supporters believe that their price appreciation against the trend has a hedging function, and that they can be used for cross-border asset transfers outside regulation. Opponents point out that they lack a value basis, have obvious risk asset characteristics, are heavily speculative, and experience excessive price volatility.
This article attempts to analyze and explain from the perspectives of risk hedging, asset realization, and regulatory evasion motivated by safe-haven attributes. This is the theoretical analysis section.

1. Resisting Wealth Devaluation Is the Main Source of Safe-Haven Attributes
When it comes to safe-haven assets, people often think of gold first, which holds an unshakable special status in the history of global finance and human civilization. This largely stems from gold’s relatively limited total supply and stable physical and chemical properties, which are also the main sources of its safe-haven attributes.
For cryptocurrencies represented by Bitcoin, on one hand, they share certain similarities with gold; on the other hand, they are relatively easier to bypass sanctions and controls, possessing the potential to resist devaluation and preserve wealth, thus also exhibiting certain safe-haven characteristics.
(1) Gold can resist both price and physical devaluation of assets
People’s fear of risk partly stems from concerns about value loss. "Safe-haven" avoidance mainly targets asset impairment risks, including price devaluation due to inflation and physical loss due to improper storage. Gold can become a safe-haven asset because it can avoid these two types of losses, thanks to its relatively limited total supply and stable physical and chemical properties: limited supply helps resist inflation and counteract price increases and fiat devaluation; its high density, soft texture, high standardization, and stable physical and chemical properties allow gold to serve as a long-term store of value without physical loss or disappearance.
(2) Cryptocurrencies and gold share certain similarities
Some compare cryptocurrencies to "digital gold." Although controversial, it is undeniable that cryptocurrencies and gold share certain similarities. On one hand, most cryptocurrencies have a limited total supply (excluding stablecoins), which also gives them the potential to resist inflation; on the other hand, cryptocurrencies are based on distributed ledger technology and exist in digital form, making them difficult to physically lose over long storage periods, highly standardized, and almost infinitely divisible.
In these two aspects alone, they are similar, and cryptocurrencies also have the potential to become safe-haven assets.
(3) Cryptocurrencies can bypass sanctions and controls
Unlike gold, which is difficult to move physically, cryptocurrencies have features such as decentralization, virtualization, and anonymity, with almost no transportation costs. This gives cryptocurrencies the potential to bypass sanctions and controls, enabling cross-border wealth preservation and transfer. In practice, a string of private keys or mnemonic phrases can be used to bypass sanctions and controls, allowing funds to be transferred globally.
For stablecoins, their prices are usually pegged to fiat currencies, and their total supply is not fixed, so their inflation resistance is weaker. Besides, their properties are similar to other cryptocurrencies, and they can also resist physical devaluation and bypass sanctions and controls.
Compared to this, using gold to achieve the same goal is generally more difficult. On one hand, physical transportation and storage are more easily disrupted—at the start of this US-Iran conflict, due to flight cancellations and shipping disruptions, a significant amount of gold was stranded in Dubai and could not be shipped out. Some traders eager to liquidate had to sell at prices $30 per ounce below the benchmark, as seen in the large amount of gold stranded in Dubai being sold at a discount.
On the other hand, the cost of controlling gold is relatively low, and government control over gold is often stronger. Many countries restrict the amount of physical gold that can be carried across borders, and during geopolitical or major risk events, some countries may limit or even ban private holdings and trading of gold.

2. Relative Price Resilience as a Direct Manifestation of Safe-Haven Attributes
The external manifestation of safe-haven attributes is relatively firm prices, generally not depreciating against fiat currencies. Commodity prices are usually determined by supply and demand, and the price fluctuations of gold and cryptocurrencies are direct reflections of the relative changes in supply and demand in their secondary markets.
Taking gold as an example, in the long term, recent central bank gold purchases have provided relatively stable price support; in the short term, supply and demand fluctuations are mainly influenced by safe-haven demand, liquidity needs, real interest rates, and other factors, leading to price volatility. Specifically:
(1) Risk-avoidance motives provide price support
Risk-avoidance motives usually arise from geopolitical or major risk events. Concerns about uncertainties drive increased demand for safe-haven assets and push their prices higher, providing price support. Moreover, this is also a process of expectation realization—people buy because they believe these assets have safe-haven properties. The increased demand reinforces the market’s perception of their safe-haven nature, further supporting prices.
(2) Asset realization motives cause price shocks
Geopolitical and major risk events often increase uncertainty, creating pessimistic expectations such as "cash is king," "lock in profits," and "hold cash and wait." Investors, seeking to hedge against future uncertainties and ensure asset safety, sell various assets to hold more cash. This results in a large supply of assets being released, causing significant shocks to financial markets. During such liquidity crises, investors tend to sell highly liquid assets first to quickly increase cash holdings. The more liquid the asset, the larger the sell-off and the stronger the price impact, which usually occurs over a short period. Over time, the impact diminishes.
Research shows that in recent years, gold and non-safe-haven assets like US stocks have moved together, indicating a weakening of gold’s safe-haven function, possibly due to the higher liquidity of gold and its derivatives. As cryptocurrencies are gradually accepted by traditional finance, their liquidity is increasing, and their correlation with traditional assets is rising, which may also weaken their safe-haven attributes.
(3) Regulatory evasion motives drive demand for cryptocurrencies
In regions embroiled in geopolitical or major risk events, people may use cryptocurrencies to bypass sanctions and controls to preserve wealth. This demand also supports prices and is an important aspect of cryptocurrencies’ safe-haven properties. A typical case is the Cyprus deposit tax event. During this period, the local population’s enthusiasm for Bitcoin increased significantly.
In April 2013, Cyprus proposed a tax on deposit accounts to obtain EU aid, triggering a nationwide bank run. People exchanged and held Bitcoin to evade taxes and preserve wealth. The price of Bitcoin rose from around $30 to a peak of $265 within days, nearly an 8-fold increase.
(4) Actual interest rates and expectations influence price trends
Since gold and cryptocurrencies are not traditional interest-bearing assets, their opportunity costs depend on actual interest rates (nominal interest rate minus inflation rate), which influence their holding costs and thus their prices. In some periods, they show an approximate negative correlation—for example, research by Erb and Harvey (2013) shows that from 1997 to 2012, gold prices and US Treasury real interest rates had a correlation coefficient of -0.82.
However, this negative correlation is not always consistent, as it is affected by multiple factors such as risk-avoidance motives, asset realization, expectations of actual interest rates, and central bank gold purchases.
Furthermore, expectations about actual interest rates also significantly impact prices. For instance, during this US-Iran conflict, the blockage of shipping through the Strait of Hormuz increased inflation expectations and lowered real interest rates. Conversely, it also reversed previous expectations of rate cuts, with markets generally expecting central banks to delay or even raise interest rates to counter potential stagflation risks. This would increase the holding costs of gold and cryptocurrencies, suppressing their prices.