#美伊局势影响 The situation in Iran continues to escalate, increasing geopolitical risks. Cryptocurrencies experienced an early geopolitical crisis "sell-off" but quickly regained ground and rebounded strongly. Does this mean that cryptocurrencies, especially Bitcoin, are being viewed again as safe-haven assets in geopolitical conflicts? The crypto market's capital flow has recorded a net inflow again; can this signal a market recovery? What will be the next development in the market?

1. Cryptocurrencies recover lost ground and surge amid geopolitical conflict
Since last night, the cryptocurrency market has surged strongly, with Bitcoin briefly breaking through $70,000, reaching as high as $70,100, with a 24-hour increase of nearly 5%. Ethereum also rose simultaneously, briefly surpassing $2,000, reaching as high as $2,090, with a 24-hour increase of over 6%. Other major coins like Solana and BNB also saw varying degrees of gains.
According to Coinglass data, in the past 24 hours, the entire network experienced $338 million in liquidations, with long positions liquidated at $137 million and short positions at $201 million, mainly short liquidations. Bitcoin liquidations amounted to $138 million, Ethereum $85.35 million, and other coins $18.23 million!
After experiencing an initial sell-off in response to the geopolitical crisis, cryptocurrencies quickly recovered and rebounded strongly as overall risk asset sentiment stabilized. Meanwhile, the crypto market's capital flow recorded a net inflow again, with institutional investors re-entering, which may also have contributed to the overall market rally.

2. Escalation in Iran situation, US monetary easing poised?

Early this morning, Beijing time, U.S. President Trump delivered a speech at the White House on Iran. Trump stated that he has ordered attacks on Iran to prevent Iran from advancing its nuclear program and a "rapidly developing" ballistic missile project.
Trump said, "This is our last and best chance to get out." He added that the progress of military action is "faster than expected," but did not disclose details. Trump emphasized that the core premise of this operation is to prevent Iran from developing nuclear weapons and to thwart its long-range ballistic missile program. He said the goals of this war include destroying Iran's missile capabilities, eliminating its navy, and preventing it from possessing nuclear weapons. Trump also mentioned that the third goal aligns with America's long-standing strategic direction—preventing Iran from supporting armed groups in the region. Additionally, Trump stated on Monday that U.S. forces are "striking hard" against Iran, but the "big wave" has not yet arrived.
Arthur Hayes, founder of Bit, said that every time the U.S. launches a selective war led by itself in the Middle East, the Federal Reserve immediately cuts interest rates (i.e., lowers rates). The higher and longer the cost and duration of the so-called "nation-building" in Iran, the greater the likelihood that the Fed will cut rates and expand its balance sheet to support American hegemony and the latest Middle East adventure.
Since 1985, the Fed's policy actions after major Middle East wars have been consistent with this pattern. Moreover, if the Iran situation further escalates, with the Strait of Hormuz being shut down for an extended period, the global economy could face a "certain recession." During economic downturns, central banks worldwide generally adopt monetary easing policies, which are favorable for cryptocurrencies.
The sharp rise in crypto on March 2 may be an early pricing of this expectation. Market analysts believe that the current Iran risk escalation mainly impacts the energy market and has absorbed the initial selling pressure caused by weekend conflicts. They consider that current geopolitical risks are still within manageable financial limits, and investors are shifting their focus back to AI trading and U.S. GDP growth fundamentals.
Furthermore, after major military actions in the Middle East, U.S. government policies have often involved Fed rate cuts, creating conditions for abundant market liquidity. As overall risk asset sentiment stabilizes, cryptocurrencies may once again be viewed as safe-haven assets in geopolitical conflicts.

3. Resumption of crypto market capital inflows, institutional re-entry

Data from CoinShares shows that last week, digital asset investment products saw $1 billion in inflows, ending a five-week streak of outflows totaling $4 billion. Bitcoin was the main beneficiary, with inflows reaching $881 million. Ethereum also saw $117 million in inflows, the largest weekly inflow since mid-January. Solana recorded $53.8 million in inflows last week, bringing its total inflows this year to $156 million. Chainlink experienced a modest inflow of $3.4 million, with no significant outflows.
Additionally, data from SoSoValue shows that last week, Bitcoin spot ETF net inflows reached $787 million. The Bitcoin spot ETF with the largest weekly inflow was the BlackRock ETF IBIT, with $503 million. The second was Grayscale Bitcoin Trust (GBTC), with $89.43 million. Ethereum spot ETF net inflows last week totaled $80.46 million. The Ethereum spot ETF with the largest weekly inflow was Grayscale Ethereum Trust (ETHE), with $40.47 million. The second was Fidelity's ETF FETH, with $39.48 million.
After more than a month, crypto market net inflows have resumed, with institutional investors re-entering through ETFs and other investment products, increasing overall market liquidity. Although the Iran situation has not yet eased, the overall market liquidity has somewhat influenced the upward trend of cryptocurrencies.

4. U.S. stocks digest early sell-off, market downplays geopolitical risk impact

Over the weekend, the Middle East geopolitical conflict escalated, but the U.S. stock market showed an unexpectedly "calm" response. On March 2, the U.S. stock market initially reacted with a sell-off at open but quickly digested the decline: the market rebounded over 1% from the early lows and closed "almost unchanged." Large tech stocks replaced previous logic, becoming a defensive safe haven for funds. Energy stocks directly benefited from soaring oil prices, while consumer and airline stocks suffered from inflation concerns triggered by rising energy costs. The S&P energy sector rose nearly 2%. Among the "Big Seven" tech giants, only Google and Amazon declined, while Nvidia rose 3%, and Google fell over 1%.
Goldman Sachs analysts pointed out that the market is downplaying geopolitical risk volatility, instead showing many "unexplainable reverse movements." They keep hearing feedback like, "We thought certain sub-sectors would open higher or lower, but the opposite happened."
Cryptocurrencies, especially Bitcoin, are increasingly correlated with U.S. tech stocks. As the Iran situation continues to escalate, the U.S. stock market has digested early conflict sell-offs, weakening the impact of geopolitical risks. It is not surprising that the crypto market is rebounding in sync with the U.S. stock market.