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

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The current market is in a macro repricing phase dominated by geopolitical factors. The escalation of issues related to Iran is increasing uncertainties about energy supply, inflation trajectories, and global growth prospects. The market had previously been trading on expectations of looser policies, but as the risk of conflict spillover 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 manageable and will ease over a reasonable time frame. However, as risks continue to accumulate, the linkage between energy, interest rates, and risk appetite is 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 show structural characteristics distinct from traditional assets.

Inflation shock dominates pricing: Energy and interest rates reshape the performance of risk assets

In the first phase of this round of shocks, the core driver remains the inflation pressure brought on by rising oil prices. Higher Brent crude oil prices are boosting inflation expectations and tightening financial conditions, putting pressure on risk assets. During this phase, both stocks and Bitcoin have found it difficult to completely avoid adjustment pressures.

However, compared to traditional risk assets, Bitcoin has a key difference: its price has already experienced a significant pullback, 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 shock. Meanwhile, in a high oil price environment, real interest rates remain elevated, increasing the opportunity cost of gold, while Bitcoin does not incur physical holding costs, thus gradually gaining an advantage in relative comparison.

As the shocks continue, the market may enter the second phase, transitioning from inflation concerns to growth concerns. Industrial commodities like copper are weakening, reflecting suppressed demand, and global growth expectations are marginally weakening. In this phase, a purely inflationary logic will no longer suffice 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 shocks continue, the market will likely enter the third phase, the policy response phase. When growth pressures increase and financial conditions continue to tighten, policymakers often intervene through fiscal or monetary means, including price controls, subsidies, or broader liquidity releases.

The key change in this phase is that market pricing will shift from “inflation-driven” to “liquidity expectations-driven.” Historical experience shows that in an environment of re-released liquidity, Bitcoin often benefits from its non-sovereign asset characteristics, demonstrating 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, and resource-exporting countries are adjusting their asset allocation structure, gradually shifting from U.S. Treasuries and equities to gold and other assets. This change compresses global liquidity space and raises long-term interest rates, complicating the macro environment. Against this backdrop, Bitcoin’s relative performance depends not only on risk appetite but also on its position in the liquidity cycle. Once the market begins to factor in expectations of policy easing, Bitcoin’s relative advantages may be further strengthened.

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

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

Some of the above views are derived from BIT on Target; contact us to obtain the full report of BIT on Target.

Disclaimer: Markets are risky, and investments should be approached with caution. This article does not constitute investment advice. Trading in digital assets can carry 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.