Bitcoin rebounds to $70,000; is it a safe-haven asset amid geopolitical crises?

Shaw, Jinse Finance

The cryptocurrency market surged last night, with Bitcoin briefly touching $70,100, a nearly 5% increase in 24 hours. Ethereum rose to $2,090, a more than 6% increase in 24 hours.

Other major cryptocurrencies such as Solana and BNB also saw varying degrees of gains.

Coinglass data shows that in the past 24 hours, a total of $329 million in positions were liquidated across the network, with $127 million in long positions and $203 million in short positions. Among them, $136 million in Bitcoin liquidations and $82.7074 million in Ethereum liquidations occurred.

The situation in Iran continues to escalate, increasing geopolitical risks. After an initial sell-off due to the geopolitical crisis, cryptocurrencies quickly recovered their losses and rebounded strongly.

Does this mean that cryptocurrencies, especially Bitcoin, are once again being seen as safe-haven assets in geopolitical conflicts?

**Cryptocurrency Market Funds Record Net Inflows Again: Can This Indicate a Market Recovery?** What's Next for the Market? I. Cryptocurrencies Recover Losses Amid Geopolitical Conflicts and Rise Strongly** Starting last night, the cryptocurrency market saw a strong surge. Bitcoin briefly broke through $70,000, reaching $70,100 at one point, a nearly 5% increase in 24 hours. Ethereum also rose in tandem, briefly breaking through $2,000, reaching $2,090 at one point, a more than 6% increase in 24 hours. Other major cryptocurrencies such as Solana and BNB also saw varying degrees of increase. According to Coinglass data, in the past 24 hours, a total of $329 million in positions were liquidated across the entire cryptocurrency exchange, with $127 million in long positions and $203 million in short positions, primarily short positions. Specifically, $136 million was liquidated in Bitcoin, $82.7074 million in Ethereum, and $17.1361 million in other cryptocurrencies. Over 102,000 people were liquidated in the past 24 hours, with the largest single liquidation occurring in Hyperliquid - BTC-USD, valued at $2.6114 million. After an initial sell-off triggered by the geopolitical crisis, cryptocurrencies quickly recovered and rebounded strongly as overall risk asset sentiment stabilized. The return of net inflows into the crypto market, indicating institutional investors re-entering, may also have contributed to the overall market's rise. II. Escalating Iran Situation: Is US Monetary Easing Imminent? Early this morning Beijing time, US President Trump addressed the nation from the White House regarding Iran. Trump stated that he had ordered an attack on Iran to stop its nuclear program and a "rapidly developing" ballistic missile project. Trump said, "This is our last and best chance to act." Trump claimed the military action was progressing "faster than expected," but did not disclose details. Trump said the core premise of the operation was to prevent Iran from developing nuclear weapons and thwart its long-range ballistic missile program. He stated that the goals of this war include destroying Iran's missile capabilities, annihilating its naval forces, and preventing it from acquiring nuclear weapons. Trump also stated that a third goal is a long-standing U.S. strategic direction—preventing Iran from supporting armed groups in the region. Furthermore, Trump stated on Monday that the U.S. military is "striking hard" at Iran, but the "big wave" is yet to come. BitMEX founder Arthur Hayes stated that whenever the U.S. launches a selective war in the Middle East, it immediately lowers the cost of money (i.e., interest rates). The higher the cost and the longer Trump's so-called "national reconstruction" in Iran, the greater the likelihood that the Federal Reserve will cut interest rates and expand its balance sheet to support the latest round of U.S. hegemony in the Middle East. This has been the Federal Reserve's policy action following major Middle East wars since 1985. (Refer to the article "Arthur Hayes: The Curse of US President's 'Middle East War' - Trump's Actions Against Iran Will Follow with Interest Rate Cuts" on Jinse Finance) Some market analysts believe that the escalation of risks from Iran is currently mainly concentrated in the energy market, and the initial selling pressure from the weekend conflict has been absorbed. They believe that the current geopolitical risks remain financially manageable, and investors have subsequently shifted their focus back to AI trading and the fundamentals of US GDP growth. Furthermore, it has become almost a given that the Federal Reserve initiates interest rate cuts after major military actions by successive US administrations in the Middle East, providing conditions for injecting substantial liquidity into the market. As overall risk asset sentiment stabilizes, cryptocurrencies may once again be seen as a safe-haven asset in geopolitical conflicts. III. Crypto Market Fund Inflows Recover, Institutions Re-enter the Market CoinShares data shows that digital asset investment products recorded $1 billion in inflows last week, ending five consecutive weeks of cumulative outflows totaling $4 billion. Bitcoin was the main beneficiary, with inflows reaching $881 million. Ethereum also recorded $117 million in inflows, marking the largest weekly inflow since mid-January. Solana recorded $53.8 million in inflows last week, bringing its year-to-date inflows to $156 million. Chainlink recorded a small inflow of $3.4 million, with no significant outflows. Furthermore, SoSoValue data shows that Bitcoin spot ETFs saw a net inflow of $787 million last week. The Bitcoin spot ETF with the largest net inflow was BlackRock's ETFIBIT, with a weekly net inflow of $503 million. Secondly, Grayscale Bitcoin Trust (GBTC) saw a net inflow of $89.4264 million for the week. The Ethereum spot ETF saw a net inflow of $80.46 million last week. The Ethereum spot ETF with the largest net inflow was Grayscale Ethereum Trust (ETHE), with a net inflow of $40.4688 million for the week. This was followed by Fidelity ETF (FETH), with a net inflow of $39.4843 million for the week. After more than a month, net inflows into the cryptocurrency market have resumed, with institutional investors re-entering the market through investment products such as ETFs, increasing overall market liquidity. Although the situation in Iran has not yet eased, overall market liquidity has also influenced the upward trend of cryptocurrencies to some extent. IV. US Stocks Digest Early Selling Pressure, Market Downplays Geopolitical Risk Impact The geopolitical conflict in the Middle East escalated over the weekend, but the US stock market showed a surprisingly "calm" response. On March 2nd, the US stock market opened with a sell-off, but quickly recovered: US stocks rebounded more than 1% from their morning lows and closed "nearly unchanged." **Large-cap tech stocks replaced the previous logic, becoming a defensive safe haven for funds.** Energy stocks directly benefited from soaring oil prices, while consumer and airline stocks were hampered by inflation concerns stemming from rising energy costs. The S&P Energy Sector rose nearly 2%. Among the "Big Seven" tech giants, only Google and Amazon closed lower, with Nvidia rising 3% and Google falling more than 1%. Goldman Sachs analysis points out that the market is downplaying geopolitical risk volatility, instead exhibiting numerous "unpredictable contrarian movements." The feedback they kept hearing was: "The sub-sectors we expected to open higher or lower turned out to be the complete opposite." The correlation between the cryptocurrency market, especially Bitcoin, and US tech stocks is increasingly strong. With the escalating situation in Iran, US stocks digested early selling pressure from the conflict, weakening the impact of geopolitical risks. It's not surprising that the cryptocurrency market rebounded in tandem with the US stock market. V. Market Analysis and Interpretation After experiencing an early geopolitical crisis "sell-off," cryptocurrencies quickly recovered and rebounded strongly. But will regional tensions continue to influence the market? Can the inflow of funds into the cryptocurrency market continue? How will cryptocurrencies develop next? Let's look at the main market analyses and interpretations. 1. Bloomberg analysis states that Bitcoin has long been touted as offering something other markets cannot: a 24/7 real-time indicator of global risk appetite. However, Bitcoin initially fell after news of the US strike on Iran, then fluctuated before ultimately rising. By Monday, its price was above pre-attack levels, leaving almost no lasting signs of panic or safe-haven demand. This movement reflects deeper issues. After falling about 50% from its all-time high, Bitcoin has been consolidating in a narrow range of around $60,000 to $70,000. Since the crypto market crash last October, most leverage has been forced out. Retail participation has decreased, and capital inflows have weakened. With overall positioning lighter, the aftereffects of new shocks are also smaller. 2. BlackRock research shows that Bitcoin tends to outperform traditional assets such as gold and stocks during geopolitical shocks. 3. Matrixport analysis states that market sentiment remains tense. However, since the market has already priced in the escalation of tensions in the Middle East for a considerable period, the related risks have been largely priced into prices, with oil prices currently reflecting a geopolitical premium of approximately $8 to $10 per barrel. If the subsequent de-escalation of the conflict proceeds faster than the market generally fears, risk assets may experience a tactical rebound. From a technical perspective, after a large-scale position clearing, Bitcoin has not experienced further significant declines, demonstrating resilience. As the market enters a consolidation phase, the RSI continues to rise, and bullish divergence is gradually emerging. As long as this indicator maintains its upward trend, downward price momentum may be suppressed. This also means that continuing to increase short positions at current levels has a diminishing risk-reward ratio. 4. Jan Van Eck, CEO of investment management firm VanEck, stated, “The crypto market rebounded today, but it’s still down more than 50% from its October high. Regarding Bitcoin, we know two things: a limited total supply of 21 million coins; and a halving cycle, where the block reward for Bitcoin miners halves every four years. Bitcoin has an investment cycle: three consecutive years of gains, followed by a significant drop in the fourth year. 2026 is that fourth year, so we are in a bear market for cryptocurrencies, more precisely, Bitcoin. Therefore, I don’t think we need to overcomplicate things. Currently, I think we are bottoming out, which is a very good sign of a recovery.” 5. Tom, Chairman of Ethereum treasury company BitMine, Lee stated in a post, "We understand that war news can make investors nervous, but we expect the stock market to rise in March, led by MAG7, the software sector (IGV), and cryptocurrencies (BTC, ETH). BitMine continues to make steady weekly purchases of ETH." Analysts warn that this surge is primarily driven by short covering, not a new wave of buying. Mark Connors, Chief Investment Officer at Risk Dimensions, points out that geopolitical turmoil and a slowdown in Bitcoin ETF outflows have triggered a market rebalancing, forcing traders who had previously bet on a decline to hastily close their positions, thus amplifying the gains. Capital Economics economists analyze that as the conflict in Iran evolves, global financial markets are likely to be impacted by fluctuations in investor risk appetite. They warn that if the conflict escalates, government bonds may not provide a reliable safe-haven asset, as expectations of monetary easing may be delayed. This situation is particularly evident in economies like the United States, where markets have already priced in numerous rate cuts. If sentiment continues to deteriorate, the dollar could continue to strengthen, primarily due to the end of rate cuts making relative yields more favorable for the dollar, and the US's status as a net energy exporter.