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The recent Iran crisis once again made it clear that Bitcoin is no longer an asset insulated from war, interest rates, and oil prices.
According to investment-focused media outlet FXStreet on March 9 (local time), Bitcoin (BTC) fell sharply immediately after news broke on February 28 of U.S. and Israeli airstrikes on Iran, reacting sensitively to geopolitical risk. At the time, Bitcoin was trading just below $68,000 ahead of the weekend, but by the time markets opened on Monday, March 2, it had slipped below $64,000, dropping about 6% in less than 48 hours. However, after reports emerged on March 4 that Iran had expressed willingness to engage in dialogue through unofficial negotiation channels, the market interpreted this as avoiding the worst-case scenario, and Bitcoin rebounded to $73,777 within a single day.
The shock was not limited to Bitcoin. Major cryptocurrencies such as Ethereum (ETH) and Solana (SOL) also plunged during the initial impact phase. According to MEXC data, leveraged position liquidations exceeded $300 million in the first 24 hours following the airstrikes. Later in the week, growing caution ahead of U.S. employment data weighed on sentiment again, pushing Bitcoin back below the $70,000 level.
The link behind the market turbulence ultimately came down to oil. The Strait of Hormuz, where Iran is located, is a crucial shipping route through which about one-fifth of the world’s oil supply passes. As concerns over supply disruptions grew following the airstrikes, Brent crude rose to around $85 per barrel. Higher oil prices stimulate gasoline, transportation, and manufacturing costs, fueling inflation concerns. This, in turn, weakens expectations for interest rate cuts by the U.S. Federal Reserve. As the likelihood of higher rates for longer increases, a stronger dollar and rising U.S. Treasury yields follow, directly pressuring dollar-denominated risk assets such as Bitcoin.
Fear was also reflected in the numbers. The CBOE Volatility Index (VIX) surged to 26.81 on March 3 before falling to 20.57 on March 4 after reports of potential negotiations. The market interpreted this as a reduced likelihood of full-scale war, and during this process Bitcoin rebounded from $64,000 to $73,777. The outlet noted that Bitcoin has recently shown a clear inverse correlation with the VIX, repeatedly weakening first when fear intensifies and recovering quickly when fear subsides.
Ultimately, the Iran crisis demonstrated that Bitcoin can no longer be viewed as an asset detached from traditional finance. Since the launch of U.S. spot Bitcoin ETFs, increased institutional inflows have led Bitcoin to be traded increasingly alongside stocks and bonds within broader risk-asset portfolios. The outlet added that if the Iran situation is resolved diplomatically in the short term, easing oil prices and inflation concerns could allow Bitcoin to attempt a move above $80,000. However, if tensions persist, a scenario involving $100 oil and a retest of the $55,000–$60,000 range cannot be ruled out.
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