BIT Research: Why Is Bitcoin Starting to Outperform Traditional Assets Amid Escalating Geopolitical Conflicts?

The current market is in a macro repricing phase dominated by geopolitical factors. The situation related to Iran is escalating, increasing the uncertainty around energy supply, inflation trajectories, and global growth prospects. Previously, the market was trading on expectations of looser policies, but as the risk of conflict spilling over rises, the pace of interest rate cuts has begun to be reassessed, and a more hawkish policy path is gradually being factored in.

From the current pricing perspective, the market still tends to view this round of shocks as a temporary inflation disturbance, with the implicit assumption that the impacts on energy and shipping are relatively controllable and will ease within a reasonable timeframe. However, as risks continue to accumulate, the linkages between energy, interest rates, and risk appetite are strengthening, and the macro narrative is shifting from “short-term inflation shock” to “potential growth shock.” In this process, Bitcoin’s performance has begun to reveal structural characteristics distinct from traditional assets.

Inflation shock dominates pricing: Energy and interest rates reshape risk asset performance

In the first phase of this round of shocks, the core driver remains the inflation pressure brought by rising oil prices. Higher Brent crude oil prices are pushing inflation expectations upward and tightening financial conditions, which suppresses risk assets. During this phase, both stocks and Bitcoin struggle to completely avoid adjustment pressures.

However, compared to traditional risk assets, Bitcoin possesses a key difference: its price has already experienced a significant decline, and the potential passive selling pressure in the market is relatively limited. This “position advantage” allows it to exhibit stronger resilience under the same macro shocks. At the same time, in a high oil price environment, real interest rates remain elevated, the opportunity cost of gold rises, while Bitcoin has no physical holding costs, thus gradually gaining an advantage in relative terms.

As the shock continues, the market may enter a second phase, transitioning from inflation concerns to growth concerns. Industrial commodities like copper are weakening, beginning to reflect suppressed demand, and global growth expectations are marginally weakening. In this phase, the simple inflation logic will no longer be sufficient to explain market trends, and the macro pricing framework will begin to change.

From growth concerns to policy responses: Liquidity expectations may become a key variable

If the shock extends further, the market is likely to enter the third phase, which is the policy response phase. When growth pressures increase and financial conditions continue to tighten, policymakers often intervene through fiscal or monetary measures, including price controls, subsidies, or broader liquidity releases.

The key change in this phase is that market pricing will shift from being “inflation-dominated” to “liquidity expectation-dominated.” Historical experience shows that in an environment where liquidity is being re-released, Bitcoin often benefits from its non-sovereign asset characteristics, exhibiting greater resilience.

At the same time, the structure of global capital flows is also changing. Since the freezing of the Russian central bank’s reserves, market trust in the “neutrality” of reserve assets has been shaken. Resource-exporting countries are adjusting their asset allocation structures, gradually shifting from U.S. Treasuries and stocks to gold and other assets. This change compresses the global liquidity space and raises long-term interest rates, making the macro environment more complex. In this context, Bitcoin’s relative performance depends not only on risk appetite but also closely relates to its position in the liquidity cycle. Once the market begins to factor in expectations of policy easing, Bitcoin’s relative advantage may be further strengthened.

Overall, the evolution path of this round of macro shocks is gradually transitioning from “oil price-driven inflation shock” to “growth shock under energy constraints,” and may ultimately enter a “liquidity phase dominated by policy intervention.” In this process, traditional assets face dual pressures of interest rates and growth, while Bitcoin, having already undergone a certain degree of price adjustment and being more sensitive to liquidity, is demonstrating relative resilience.

For investors, the key at this stage is not the short-term volatility itself, but rather identifying the stage switch in the macro narrative. Once the market shifts from inflation logic to liquidity logic, Bitcoin may transform from a passively pressured asset to a relative beneficiary in the next round of pricing.

The above opinions are partly derived from BIT on Target. Contact us for the complete report of BIT on Target.

Disclaimer: Markets carry risks, and investments should be made cautiously. This article does not constitute investment advice. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided herein.