Bitcoin would likely suffer initial losses in a major geopolitical conflict before potentially emerging as a safe-haven asset if the crisis persists and governments respond with capital controls, looser monetary policy and fragmented financial systems.
What Happened: Bitcoin's Dual Identity in Crisis
A BeInCrypto analysis of various forecasts examines how the cryptocurrency might perform across different phases of a large-scale military conflict involving nuclear powers.
The analysis defines a World War III scenario as direct, sustained conflict between nuclear powers that expands beyond one theater. Europe combined with the Indo-Pacific represents the clearest route to such an escalation.
Bitcoin does not behave as a single asset class during wartime scenarios.
It functions as a high-beta risk asset during the initial shock phase, when investors raise cash and risk desks cut leverage across markets.
In subsequent weeks, Bitcoin can shift toward behaving like a portable, censorship-resistant store of value. This transition depends largely on government responses including capital controls, currency stability and banking rail access.
The analysis identifies multiple current flashpoints that have tightened the margin for error globally.
Europe's security debate has moved from theoretical discussions to operational planning around post-war security guarantees for Ukraine, a topic Russia has historically treated as a red line.
In the Indo-Pacific, China's military drills around Taiwan have increasingly resembled blockade rehearsals. A blockade-style crisis does not require an invasion to disrupt markets, according to the analysis. Shipping disruption and a single incident at sea could trigger significant volatility.
Market studies of past conflicts show that assets often sell off during uncertainty, then trade based on policy responses.
Gold typically catches the first safety bid, while the U.S. dollar strengthens and credit spreads widen.
Why It Matters: The Policy Response Determines Outcome
Bitcoin's performance in a protracted conflict hinges on four factors: dollar liquidity conditions, real yield movements, capital control implementation and infrastructure reliability. Tight USD conditions hurt Bitcoin while easier conditions help.
The analysis outlines three distinct phases of market behavior.
The first week represents forced selling, where correlations jump and Bitcoin trades with liquidity risk alongside equities.
During a stabilization phase, markets shift from asking what happened to questioning what policy will do next. If central banks respond with liquidity support, backstops or stimulus, Bitcoin often rebounds with risk assets.
If policymakers instead tighten controls on capital, banking rails or crypto on-ramps, the rebound can become uneven with higher volatility and regional fragmentation.
Rising real yields pressure both Bitcoin and gold.
Capital controls and sanctions can increase demand for portable assets while simultaneously restricting access to them.
The network can remain functional while individuals struggle to move capital through regulated chokepoints. If conflicts expand sanctions, restrict cross-border transfers or destabilize local currencies, demand for transferable value increases, supporting Bitcoin's medium-term case even after an ugly first week.
Silver behaves as a hybrid asset that can rally with gold as a fear hedge, then experience sharp reversals because industrial demand matters.
Oil spikes from supply route threats can shift inflation expectations quickly, forcing central banks to choose between growth and inflation control.
The analysis suggests Bitcoin probably does not start a war trading as digital gold, but it can end up behaving like one if conflicts drag on and policy conditions align.