Iran Conflict: Bitcoin Shows Strength – But the Real Risks Lurk Ahead

Bitcoin Defies Geopolitical Escalation – But the Calm May Be Deceptive

The Iran conflict has put global markets on high alert. Oil prices are rising, air traffic in the Gulf region is being restricted, and concerns about further escalation grow daily. In this environment, Bitcoin is showing remarkable resilience, which should not distract investors from potential risks. While some market segments could even profit from the crisis, experts identify critical transmission channels through which geopolitical tensions could have a delayed impact on the crypto market.

Parallel to market developments, convicted FTX founder Sam Bankman-Fried is making headlines: With public support for Donald Trump's Iran policy, the fraudster sentenced to 25 years in prison is apparently trying to improve his chances of a presidential pardon – so far without success.

The Facts

Following the initial U.S. military strikes on Iran last weekend, Bitcoin initially reacted with a selloff below $64,000 ^[1]. However, recovery followed quickly: The price stabilized and subsequently rose to as high as $70,000 ^[1]. This development is surprising given the typical risk-off dynamics during geopolitical crises.

Martin Leinweber, Director of Digital Asset Research & Strategy at MarketVector Indexes, interprets this stability as a double-edged sword. Speaking to BTC-ECHO, he warns: "At first glance, this is positive, but it also suggests that the market is pricing in Iran's weak position and expecting a quick de-escalation. Should this expectation be disappointed, the correction potential would be correspondingly larger" ^[1].

According to Leinweber, the real danger for Bitcoin and other risk assets lies in indirect effects through three central transmission channels: First, the initial risk-off reaction with liquidity withdrawal. Second, rising oil and energy prices that affect monetary policy in the medium term through increased inflation expectations. And third, a strengthening U.S. dollar, which typically weighs on emerging markets and crypto assets in stress scenarios ^[1]. Particularly critical: "If oil prices rise sustainably, this increases inflationary pressure – and that could dampen expectations for Fed rate cuts. Fewer rate cuts mean less liquidity, which would be burdensome for risk assets" ^[1].

Florian Döhnert-Breyer, co-founder of Berlin-based crypto fund F5 Crypto, identifies an unexpected beneficiary of the crisis in the perpetual futures platform Hyperliquid. Since the introduction of HIP-3, this platform enables 24/7 trading not only in cryptocurrencies but also in stocks, private companies, and commodities ^[1]. "On Hyperliquid, oil perpetuals rose by about five percent to $70.6 over the weekend, even before traditional futures markets opened," explains Döhnert-Breyer ^[1]. The platform translates volatility directly into cash flows used for token buybacks – a business model that could partially decouple from Bitcoin's price development ^[1].

Apart from market developments, Sam Bankman-Fried is making headlines. The FTX founder sentenced to 25 years in prison, who has been serving his sentence since March 2024, used the messaging platform X to endorse U.S. military action against Iran and explicitly praise President Trump. "This is how regime change is done," he wrote, praising the "surgical" precision of operations in Iran and Venezuela compared to the war deployments in Iraq or Afghanistan ^[2]. Observers suspect a calculation behind the public Trump courting: Bankman-Fried had speculated in recent months about a presidential pardon after Trump pardoned Binance founder Changpeng Zhao in 2024 ^[2]. In early 2025, however, Trump explicitly ruled out pardoning the FTX founder ^[2].

Analysis & Assessment

The current market stability of Bitcoin should not obscure the fact that the actual risks have not yet materialized. History shows: Geopolitical crises rarely affect crypto markets immediately, but rather through delayed macroeconomic channels. The crucial question is not how Bitcoin reacts to the initial headlines, but how sustainably the conflict affects energy markets, inflation, and monetary policy.

Particularly critical is the dynamic between oil prices and Fed policy. Should oil prices rise sustainably due to persistent or escalating tensions, this would fuel inflation and force the Fed to reconsider or even halt its rate-cutting course. Fewer rate cuts mean a longer period of restrictive monetary policy – and thus less liquidity for speculative assets like Bitcoin. Historically speaking, it is precisely these macroeconomic framework conditions, not the geopolitical events themselves, that significantly influence Bitcoin cycles.

At the same time, the crisis reveals structural advantages of decentralized financial markets. The fact that Hyperliquid could already reflect oil price movements over the weekend while traditional markets were closed demonstrates a concrete use case for crypto infrastructure beyond speculation. This advantage could intensify if geopolitical uncertainties increase and investors seek markets that function independently of traditional trading hours and national restrictions. The same applies to privacy coins in regions with capital controls – a scenario that could gain relevance with escalating conflicts and resulting sanctions regimes.

Sam Bankman-Fried's desperate attempts to achieve a pardon through public Trump praise are more of a footnote – albeit one that shows how far the former crypto wunderkind has fallen. His chances of presidential clemency appear minimal after Trump's clear rejection earlier this year. However, the case illustrates the ongoing reputational burden that the FTX collapse has inflicted on the entire industry.

Conclusion

• Current Bitcoin stability reflects market expectations of a quick de-escalation – not fundamental strength. A disappointment of this expectation could lead to disproportionate corrections

• The real risks lie in indirect effects: If oil prices rise sustainably, higher inflation and more restrictive monetary policy threaten – both poison for Bitcoin and other risk assets

• Decentralized trading platforms like Hyperliquid demonstrate their structural advantage over traditional markets during crises and could benefit as a segment from increasing geopolitical uncertainty

• Investors should use the coming weeks to closely monitor oil price developments and Fed rhetoric – these factors will determine Bitcoin's medium-term development, not the military headlines themselves

• Sam Bankman-Fried's public Trump courting underscores the convicted fraudster's desperation, but is unlikely to improve his pardon chances