Bitcoin and Ethereum rebound: Geopolitical safe-haven and energy shock narrative contest

April 8, 2026, the United States and Iran announced a two-week temporary ceasefire and agreed to hold direct negotiations in Islamabad, Pakistan. This is the highest-level face-to-face negotiation between the US and Iran since 1979, and the first direct dialogue between the two countries since 2015. The market responded quickly—expectations of a ceasefire drove a broad rebound in global risk assets, with Bitcoin surging over 4% at one point on the day.

However, in the early hours of April 12, after approximately 21 hours of marathon negotiations, the talks broke down. US Vice President Vance stated at a press conference that the US side “made very clear red lines,” but Iran “chose not to accept the US conditions.” Iran indicated that the disagreements on three core issues—control of the Strait of Hormuz, the unfreezing of overseas assets, and uranium enrichment—were sharp. After the negotiations ended, President Trump announced that the US Navy would immediately blockade the Strait of Hormuz, and the Iranian Revolutionary Guard Corps warned that “any wrong action will trap the enemy in the deadly whirlpool of the strait.”

A rapid shift from “diplomatic expectations” to “military confrontation” not only reshaped the global energy market’s pricing logic but also subjected the geopolitical risk narrative of crypto assets to a real stress test.

From Conflict Outbreak to Negotiation Breakdown

Since the US-Israeli coalition launched military strikes against Iran on February 28, 2026, this round of Middle East conflict has lasted over a month and a half. Below is a timeline of key events:

Phase One: Conflict Outbreak and Market Panic (February 28—Early March)

On February 28, after news of the military strikes, Bitcoin plummeted nearly 6% in 45 minutes, dropping from about $70k to $63,038, triggering forced liquidation of about $515 million in long positions, with the overall crypto market cap evaporating over $128 billion. Panic and greed indices fell into the “extreme fear” zone.

Phase Two: Rising Safe-Haven Expectations (Mid-March—Early April)

As the fighting entered a stalemate, market pricing logic diverged. Gold retreated from its high point, while Bitcoin gradually stabilized and rebounded supported by continued institutional inflows. Spot Bitcoin ETFs saw about $1.7 billion in net inflows in the first two weeks after the conflict, becoming an important buffer against macro shocks.

Phase Three: Ceasefire and Negotiations (April 8—April 12)

The ceasefire announcement on April 8 pushed Bitcoin up 4.9% to $72,738, the highest level since March 18. But after the negotiations broke down on April 12, Bitcoin’s price quickly fell back from around $73,800, briefly dropping below $70,500.

Phase Four: Blockade Takes Effect and Rebounds (April 13—Present)

On April 13, the blockade of the Strait of Hormuz officially took effect. WTI crude futures temporarily broke above $105 per barrel, Brent crude surpassed $103. The next day, Trump signaled continued negotiations, and Bitcoin broke through $74,000 amid short squeeze effects, with a daily increase of over 5%, reaching a high of $74,888 during the session—the highest since the conflict erupted. The total liquidation of short positions in the market reached $427 million.

The Safe-Haven Narrative Is Being Rewritten

As of April 15, 2026, according to Gate market data, Bitcoin was quoted at approximately $73,994, Ethereum at about $2,325, with 24-hour changes of -0.54% and -2.04%, respectively. Over the past week, Bitcoin has risen about 8%, and Ethereum about 12%. However, current prices are still far below their 2025 all-time highs—Bitcoin’s peak of $126,080 on October 7, 2025, and Ethereum’s $4,946 on August 2025. There is about a 41% and 53% retracement space from their respective peaks.

Asset Performance Comparison Since Conflict Outbreak

Data sources: Gate market data, Bitwise research reports, as of mid-April 2026

These data reveal a key feature of this round of conflict: the performance divergence between crypto assets and traditional safe-haven assets has reached a historically rare level. Since the escalation at the end of February, Bitcoin has risen about 12%, while gold has fallen about 10%, and the S&P 500 has declined about 1%. Bitwise Chief Investment Officer Matt Hougan pointed out that Bitcoin’s performance “is not contrary to a safe-haven environment but is directly driven by geopolitical conflict.”

In terms of capital flows, in the first quarter of 2026, institutional net accumulation was about 69,000 Bitcoin, while retail investors net sold about 62,000 Bitcoin. This indicates that large investors are using geopolitical panic-induced price drops to accumulate positions rather than following retail investors out of the market.

Over the past week, Bitcoin rose 8%, Ethereum 12%; since the conflict erupted, Bitcoin has increased about 12%, gold declined about 10%. The divergence in performance between crypto assets and traditional safe-haven assets reflects a re-pricing of the “super-sovereign asset” narrative.

Safe-Haven Asset or Risk Asset?

There is a significant divergence in current market views on the role of crypto assets amid geopolitical crises, centered around two opposing narrative frameworks:

Bitcoin as the New “Digital Gold”

Represented by institutions like Bitwise and GSR. Bitwise Asset Management states that Bitcoin is carrying both “value storage” and “potential international settlement currency” logic. As the financial system is “weaponized” and global payment systems fragment, the appeal of non-sovereign, neutral assets continues to rise.

GSR Managing Director Andy Baehr said in an interview, “Bitcoin is actually behaving like a safe haven,” noting that during the initial phase of the conflict, the asset rose about 4%, while oil prices surged over 70%, and global equities were sold off.

The most impactful evidence supporting this narrative is Iran’s actual behavior—reportedly, Iran is demanding a $1 per barrel fee for oil tankers passing through the Strait of Hormuz paid in Bitcoin, with each tanker costing up to $2 million. This is the first time a sovereign state has used Bitcoin in real-time trade to bypass traditional financial systems. Bitwise interprets this as: geopolitical fragmentation is pushing some countries to explore alternative pathways outside traditional finance, which could elevate Bitcoin’s potential role in the global monetary system, with long-term price expectations possibly underestimated.

Bitcoin Still a High-Volatility Risk Asset

The opposing view holds that crypto assets behave more like high-volatility risk assets during genuine war panic, with increased correlation to US stocks. Data from 2025–2026 show that early-stage geopolitical events often lead to synchronized declines in crypto assets and risk assets, rather than gold’s typical rise.

Specifically, on the first day of this conflict, Bitcoin plunged 6%, closely matching the 13% drop on the first day of the Russia-Ukraine conflict in 2022. The “follow-the-dip” characteristic of crypto markets during geopolitical crises fundamentally reflects their current ambiguous identity between liquidity-sensitive assets and tail-risk hedging tools.

Industry Impact Analysis: Structural Changes in Crypto Market Geopolitical Sensitivity

Crypto markets’ sensitivity to geopolitical signals has significantly increased

Over the past month, Bitcoin’s price movements have shown a high degree of correlation with developments in US-Iran negotiations. From the rally triggered by the ceasefire announcement on April 8, to the sharp decline after negotiations broke down on April 12, and then to the breakout above $74,000 following Trump’s signals on April 14—Bitcoin’s pricing has demonstrated extreme sensitivity to the marginal changes in US-Iran relations. This suggests that geopolitical factors have become one of the core variables in current crypto market pricing, even temporarily surpassing traditional macro factors like Federal Reserve monetary policy.

Institutional capital plays a stabilizing role amid volatility

On-chain data shows that global exchange-held Bitcoin reserves have fallen to about 2.69 million, the lowest since early 2023. From a peak of around 3.2 million in mid-2024, reserves have been steadily declining, with daily outflows of 60k to 70,000 BTC common. Meanwhile, in Q1 2026, institutional net accumulation was about 69,000 BTC, forming a persistent buying force. This structural shift indicates that the holder composition in crypto markets is evolving toward greater resilience—long-term holders are increasing, and short-term selling pressure is relatively reduced.

The macro transmission chain is more complex

The blockade of the Strait of Hormuz not only directly impacts oil prices but also influences crypto assets through a chain of effects: “oil price surge → inflation rise → further narrowing of the Fed’s rate cut window.” Goldman Sachs predicts that if the Strait remains closed for a month, Brent crude could average over $100 per barrel in 2026; longer closures could push the quarterly average to $120. Under this chain, crypto assets face a more complex tug-of-war: rising oil prices and inflation expectations pressure valuations, but geopolitical fragmentation and the search for “non-sovereign settlement assets” provide support.

Conclusion

In the past week, the crypto market experienced a “V-shaped” reversal driven by geopolitical signals—from the rally sparked by ceasefire expectations, to the sharp decline after negotiations broke down, and then to a short squeeze breakout. Bitcoin gained 8% over the week, Ethereum 12%, completing a cycle of intense stress testing amid a highly uncertain macro environment.

However, Bitcoin at $74,000 and Ethereum at $2,300 are still far from their 2025 all-time highs. This gap itself indicates that while geopolitical premiums can drive temporary rebounds, returning to and surpassing previous highs still requires a combination of the crypto market’s intrinsic narrative and favorable global macro liquidity conditions.