Bitcoin Up 6% as Geopolitics Replace Macro Data
Bitcoin outperformed traditional safe havens as institutional investors treat it as a hedge against geopolitical risk rather than a macro-driven asset. Gold gained just 1% while equities fell amid Middle East conflict escalation.
Key Takeaway
Bitcoin now responds to geopolitical shocks more than interest rate expectations, marking a shift in institutional behavior.
CoinShares Head of Research James Butterfill says geopolitics now drives Bitcoin more than macro data.
"Macro data has been demoted as a driver of Bitcoin. Geopolitics has been promoted," Butterfill said. "For now, that transition is working in Bitcoin's favour." Bitcoin gained 6% since the Middle East conflict began, outperforming gold's 1% rise and falling equities.
The performance breaks from Bitcoin's traditional relationship with interest rates. US interest rate cut expectations dropped to 23%, their lowest level this cycle, after last week's weak jobs data. Iran warned yesterday that oil could hit ₱11,898 ($200) per barrel if US and Israel strikes continue — a combination that would typically pressure risk assets.
Butterfill called the divergence analytically important. Institutional investors recorded three consecutive weeks of net inflows into crypto products despite rising oil prices threatening inflation and lower rate cut expectations weakening the growth outlook. "We read this as a meaningful signal: institutional investors are treating Bitcoin as an asset worth holding through geopolitical turbulence, not one to be exited," he said.
The pattern contrasts with April 2025, when Trump's Liberation Day tariffs caused a 10% Bitcoin drop below ₱4,640,384 ($78,000). Trade barriers hit crypto harder than military conflicts, with Ethereum losing 25% over three days during that episode.
This article was written based on reporting from Dlnews.
