Bitwise Links Global Conflict to Potential Bitcoin Upside

Bitwise Europe says rising geopolitical tension is pressuring bitcoin in the short term, but historical data suggests periods of elevated global risk have often preceded above average crypto returns. The firm outlined its view in the March 2 edition of its Weekly Crypto Market Compass titled Bitcoin Under Pressure as Geopolitical Risks Rise Why History Points to a Bullish Setup.

The report links current Middle East tensions and broader market volatility to patterns seen in previous risk spikes.

Good to Know

• Global crypto ETPs saw $1.04B in net inflows last week
• $881M flowed into bitcoin products alone
• High geopolitical risk historically preceded stronger 1 month bitcoin returns

Bitcoin briefly moved back above $69,000, supported by what Bitwise described as the strongest net inflows into global bitcoin exchange traded products since early January. The rebound faded as broader risk sentiment weakened following U.S. and Israeli strikes against Iran.

Bitwise analysis shows that when the Geopolitical Risk Index enters the top 20% of historical readings, bitcoin has often delivered above average forward returns over the next month, despite near term pullbacks.

The report states:

“Although bitcoin tends to trade lower in the short-term, geopolitical risks usually tend to mean-revert and decline to lower levels, which tends to provide a renewed tailwind over the medium- to long term.”

Researchers added:

“This historical pattern has shown that the risk-reward has been positively skewed to the upside after major geopolitical risk events, although downside risks may remain in the short-term.”

Bitwise connects that pattern to macroeconomic responses that often follow armed conflicts. Governments typically increase fiscal spending, and central banks may expand monetary conditions. Such reflationary cycles have historically supported scarce assets, including bitcoin.

Energy markets also factor into the outlook. Tokenized oil markets recently approached $80 per barrel, reinforcing inflation expectations. Higher inflation can influence liquidity conditions and asset allocation decisions across risk markets.

The report states:

“If past reflation cycles are any guide, this may provide a potential macro tailwind for bitcoin and other major cryptoassets for the remainder of 2026.”