War and Crypto Assets: Analyzing the Bitcoin Price Trajectory Over the Past Five Years

Recently, a series of geopolitical events have raised concerns about the reactions of the Crypto Assets market. Between 2020 and 2025, multiple significant conflicts have shown Bitcoin's price sensitivity to geopolitical situations. This article will deeply analyze the impact of major conflicts on Bitcoin's price trends over the past five years, as well as the recovery trajectory of the Crypto Assets market after the conflicts end.

Russia-Ukraine Conflict: Turning Point for the Crypto Assets Market

Market turbulence at the beginning of the conflict

On February 24, 2022, the Russia-Ukraine conflict fully erupted. The market speculated that Russian funds might flow into Crypto Assets, driving the price of Bitcoin to soar by 20% in a short period, briefly breaking the $45,000 mark. At the same time, reports indicated that some Russian billionaires were attempting to transfer their assets through Bitcoin, seemingly confirming the value of Crypto Assets during times of crisis.

However, in the long term, as the conflict drives up energy prices in Europe and forces the Federal Reserve to aggressively raise interest rates, Bitcoin experienced a significant decline of 65% in 2022. Although this downward trend cannot be entirely attributed to the war, the uncertainty of the geopolitical situation has undoubtedly intensified market pessimism.

Interestingly, the ongoing conflict has provided new narrative support for Bitcoin. Ukraine has raised a significant amount of donations through Crypto Assets, highlighting the unique value of digital coins in situations where traditional finance is constrained. At the same time, in the face of Western sanctions, Russia has turned to Crypto Assets to some extent, further strengthening Bitcoin's position as an alternative financial tool.

It is worth noting that compared to the long-term bear market that Bitcoin fell into during Russia's invasion of Ukraine in 2014, Bitcoin in 2022 has evolved into a larger, more mature asset class that is recognized by institutional investors.

Middle East Conflict: A Test of Market Resilience

Short-term Impact and Rapid Recovery

In October 2023, a new round of conflicts broke out in the Middle East. In the early stages of the conflict, Bitcoin fell below $27,000, setting a new low since September. However, compared to previous geopolitical conflicts, the prices of digital assets did not show significant fluctuations. This relative stability reflects a decreased sensitivity of the Crypto Assets market to geopolitical events.

In April 2024, the situation in the Middle East escalated again. On the day of the missile attack, the volatility of Bitcoin was only ±3%, less than one-third of that during the start of the Russia-Ukraine war in 2022. The participation of institutional investors has, to some extent, alleviated market fluctuations.

In June 2025, the regional situation further deteriorated. Although Bitcoin fell by 4.5% to $104,343 within 24 hours, this decline is still manageable relative to the severity of the events, demonstrating strong resilience.

However, the geopolitical risk index shows that the current risk level remains high. The index is around 158, close to the level at the beginning of 2024. High risk usually means that investments, stock prices, and employment rates may face downward pressure.

Ceasefire Moment: A Window for Observing Capital Logic

The signing of a ceasefire agreement is often the best time to observe the flow of capital. After the conflict in a certain region ended in November 2020, Bitcoin nearly doubled in the following 30 days. This was mainly because the conflict did not change the global easing monetary policy tone.

In contrast, during the Russia-Ukraine negotiations in March 2022, the brief hope for a ceasefire was quickly shattered by the Federal Reserve's interest rate hike expectations, and Bitcoin subsequently fell by 12%.

On the day of the temporary ceasefire in the Middle East in November 2023, the crypto derivatives market experienced a large number of liquidations. Soon after, the narrative of war was quickly replaced by other market factors.

In January 2025, when the conflicting parties in the region agreed to a ceasefire and exchanged prisoners of war, Bitcoin once again broke through $100,000 before retreating. This series of events prompted the market to reassess Bitcoin's safe-haven properties.

Entering the Institutional Era

Although the application scenarios of digital assets in warfare continue to expand, the focus of mainstream markets has shifted towards the participation of institutional investors. Data shows that less than 5% of the safe-haven funds released by geopolitical conflicts ultimately flow into the crypto assets sector, and this proportion may further decrease in the ETF era.

The real turning point lies in monetary policy. When the Federal Reserve begins its interest rate cut cycle, the signing of a ceasefire agreement may become a catalyst for capital inflows. In June 2025, U.S. interest rate futures indicate a slight increase in the probability of a rate cut in September to 71%. However, if the conflict leads to a disruption of energy supply chains, even if the fighting subsides, the shadow of economic stagflation may still suppress the Crypto Assets market.

Recovery Patterns of the Post-War Crypto Market

Historical experience shows that the end of conflicts usually leads to a gradual restoration of market confidence. For the Bitcoin market, the advancement of the peace process often reduces geopolitical risk premiums and increases investors' risk appetite. If Bitcoin demonstrates good risk resistance during conflicts, it may attract more institutional investors to increase its weight in their portfolios.

Conclusion

Looking to the future, with technological advancements and improved regulatory frameworks, Crypto Assets are expected to play a more important role in the global financial system. Although it still faces various challenges and fluctuations in the short term, its position as an important financial tool in the digital age has been initially established.

In this era full of uncertainty, digital assets are redefining our understanding of currency, value storage, and financial systems. Although the road ahead is fraught with challenges, the historical significance and potential value of this transformation cannot be ignored.