Author: Ada, Shenchao TechFlow

In the early morning of February 28, the United States and Israel launched a joint military strike against Iran.

The textbook says: When war comes, buy gold.

But this time, the textbook seems to be wrong.

Gold briefly surged from $5,296 to $5,423, and then fell all the way to around $5,020, closing in the red for two consecutive weeks. Bitcoin has rebounded from panic lows of $63,000 to $75,000, up more than 20%, outperforming gold, outperforming the S&P, and outperforming the Nasdaq.

In the same war, at the same time, gold fell and Bitcoin rose.

What happened?

Gold: Being held back by interest rates

On the day the war broke out, gold's performance was normal. Gold prices surged 2% on the 28th, breaking through $5,300. Panic buying poured in and everything looked exactly like the historical script.

Then the script collapsed.

On March 3, gold prices plunged more than 6% to $5,085. It then fluctuated between $5,050 and $5,200 for two weeks, with no direction. As of press time, spot gold is about $5,020, down nearly 10% from its all-time high of $5,416 at the end of January.

The war is still going on, cannonballs are still flying, but gold is falling more and more.

The chain is like this: During this war, the Strait of Hormuz was blocked. About one-fifth of the world's seaborne oil passes through this waterway. Iran blocked the strait, insurance companies withdrew ship coverage, tankers stopped shipping, and oil prices topped $100. The International Energy Agency urgently released 400 million barrels of strategic oil reserves, double the amount in 2022 during the Russia-Ukraine war. "A loophole this big cannot be closed," said Daniel Ghali, commodities strategist at TD Securities.

The surge in oil prices has triggered inflation expectations. Markets are beginning to reprice the Fed's rate cut path. Before the war, markets were also pricing in two rate cuts in 2026. But traders now see almost zero chance of a rate cut at this week's Fed meeting, according to Bloomberg.

High interest rates are the natural enemy of gold. Gold does not earn interest. The higher the interest rate, the greater the opportunity cost of holding gold. Funds naturally flow to interest-bearing assets such as U.S. Treasuries. Commerzbank commodities analyst Barbara Lambrecht said: "Gold prices have continued to fail to benefit from this geopolitical crisis. Oil and natural gas prices have risen sharply again this week, and inflation risks have increased, which may force central banks to take countermeasures."

The traditional logic is that war causes panic, and panic pushes up gold. But this time the chain has changed - the war caused oil prices to soar, which in turn triggered inflation. Inflation locked interest rates, and interest rates suppressed gold. What gold is afraid of is not the war itself, but the inflationary consequences of the war.

There is another more alarming signal. The governor of the Polish Central Bank recently publicly stated that he was considering selling part of his gold reserves to lock in profits. Over the past three years, gold purchases by global central banks have been the biggest driver of gold price increases. If even central banks start to loosen up, cracks will appear in gold's long-term support. Philip Newman, director of precious metals consultancy Metals Focus in London, said: "Some investors were disappointed with gold's lackluster response after the outbreak of the war and have begun to reduce their positions. This reduction in positions itself has in turn strengthened the weakness in prices."

Bitcoin: Bucking the Trend

On February 28, news broke of the US-Israel joint attack on Iran. Bitcoin, the only liquid asset still trading on the day, plunged 8.5% in a matter of minutes, from $66,000 to $63,000.

Gold has risen, the U.S. dollar has risen, and Bitcoin has fallen. Everyone’s first reaction is the same: Bitcoin is a risk asset, not a safe haven asset.

Looking back two weeks later, things are much more complicated than this judgment.

On March 5, Bitcoin rebounded to $73,156. On March 13, it briefly topped $74,000. At press time, Bitcoin was trading at $73,170, up about 20% from its pre-war lows. Gold has fallen about 3.5% over the same period, and the S&P 500 has fallen about 1%.

Bitcoin outperforms all traditional safe-haven assets. This is true. but why?

The most popular explanation in the market is: the war led to fiscal expansion and economic recession, the Federal Reserve was eventually forced to cut interest rates and print money, and loose liquidity was good for Bitcoin. This narrative sounds sexy, but there is an obvious logical flaw - if the inflation caused by the war prevents the Fed from cutting interest rates, "releasing water" will not happen. And even if the Fed does release water, gold will also benefit. Pure "water release expectations" cannot explain the divergence between gold and Bitcoin.

The more honest answer is that several factors are added together.

First, technical oversold rebound. Bitcoin has fallen about 50% from its all-time high of $126,000 last October to $63,000. In early February, a sudden wave of liquidations wiped out $2.5 billion in leveraged positions in one weekend. CoinDesk’s analysis believes that the liquidation “removed the weakest holders and reset market positions”, leaving a leaner market. So when the war comes, Bitcoin doesn't have much floating chips that can be sold in retaliation.

Second, the structural advantages of 24/7 trading. February 28 was Saturday, when the United States and Israel launched an attack on Iran, global stock markets, bond markets, and commodity markets were closed. Bitcoin is the only liquidity window open. It was hit first because panic funds needed to be liquidated immediately; but it was also the only place that could handle the return of funds before the market opened on Monday.

Third, ETF funds return. U.S. spot Bitcoin ETFs saw net inflows of more than $1.34 billion in March, marking three consecutive weeks of net inflows, the longest stretch since July last year. BlackRock’s IBIT attracted nearly $1 billion in new funding in March alone. The world's largest gold ETF (SPDR Gold ETF) saw outflows of more than $4.8 billion during the same period. Funds are moving, but this is more like institutions re-allocating their positions. Whether it constitutes a long-term trend, it is too early to draw a conclusion.

Fourth, portability in war. This factor is rarely mentioned in mainstream analyses, but is extremely important in the specific scenario of war in the Middle East. Dubai is a core hub for global gold trading, connecting European, African and Asian markets. After the war broke out, Dubai's gold logistics network was severely impacted. Routes were interrupted, insurance failed, and physical gold was trapped in warehouses and could not be shipped out. You can't carry a ton of gold bars through a war zone. Bitcoin is the complete opposite - a person can take nothing with him, remember 12 mnemonics, and walk across the border, which is equivalent to taking away all his property. After the war broke out, outflows from Nobitex, Iran’s largest crypto exchange, surged 700%. This isn’t investors being bullish on Bitcoin, this is people voting with their feet in a war and choosing what’s easiest to take away.

Tiger Research pointed out in the report: "In finance, a 'safe haven' refers to an asset whose price can be stable in a crisis. This and 'an asset that can be used in a crisis' are two completely different concepts." Bitcoin clearly belongs to the latter in this war.

No single factor alone can explain it all. But taken together, they explain why Bitcoin fares better in this war than most expected.

Two accidents

Putting these two lines together, the war produced two surprises.

The first surprise was gold. It fell when it should have risen most. This war directly hits energy supply and triggers not simple panic but inflation. Inflation expectations suppress gold prices through the interest rate chain. The hedging function of gold is not unconditional - when the transmission path of war is that the crisis triggers inflation and interest rates cannot go down, gold will be stuck in the middle and cannot move. There's also an often-overlooked physical weakness: physical gold is difficult to move during war.

The second surprise is Bitcoin. It rose when it should have fallen most. But this does not mean that Bitcoin has "mature" as a safe-haven asset. Its performance is more like the superposition of multiple technical factors and structural advantages. Aurelie Barthere, chief research analyst at Nansen, noted that Bitcoin’s downside sensitivity to war news has significantly reduced, with the European Stoxx Index falling harder than Bitcoin during the same period. CoinDesk's analysis puts it more accurately: "Bitcoin is not a safe haven, nor is it a pure risk asset. It has become a 24/7 liquidity pool, absorbing shocks when other markets close, faster than anything."

Every time there is news about the escalation of the war, Bitcoin will still fall. It just falls less and bounces faster each time.

Old Map, New World

In the past five years, the market has told a concise and powerful story: gold is the anchor in troubled times, and Bitcoin is digital gold.

The war in the Middle East in March 2026 took this story apart.

Gold’s safe-haven credit for thousands of years has not collapsed, but it has exposed a weakness that is rarely written clearly in textbooks: when the transmission path of war is inflation rather than simple panic, interest rates will be more powerful than geopolitics. Bitcoin outperformed gold, but this does not mean that it has taken over the banner of "safe haven asset". Its rise is the result of the simultaneous efforts of the four lines of oversold rebound, structural advantages, institutional allocation and war portability, and is not a formal crowning of its identity by the market.

The subsequent trend depends on two variables: how long this war will last, and what the Fed ultimately chooses. Gold and Bitcoin are betting on different outcomes of the same war, and the outcome is not yet known.

The word "hedging" may need to be redefined after this war. It is no longer an asset class label, but a question about the time dimension. Are you hedging today's risks or betting on tomorrow's world.

Gold and Bitcoin give two completely different answers.