BlackRock Report: Why Is Bitcoin the Strongest Rebound Asset During Geopolitical Crises?

Article by Blockchain Knight

At a time when conflicts between Israel and Iran have erupted, Bitcoin experienced a decline on the day of the conflict but then rebounded strongly, reaching $70,000 last night. Let’s take a look at how Bitcoin performed amid geopolitical crises through a research report from BlackRock.

The report from BlackRock states that Bitcoin has demonstrated a unique safe-haven value during market turbulence such as geopolitical conflicts and financial crises, distinguishing it from traditional assets. It is an important choice for hedging against global fiscal, monetary, and geopolitical risks.

As the first globally adopted internet-native currency, Bitcoin fundamentally addresses issues such as inflation devaluation of traditional currencies, cross-border transaction friction, and access restrictions.

Bitcoin shows long-term low correlation and short-term linkage with traditional assets. Its 10-year correlation with the S&P 500 is only 0.2, similar to gold. Short-term linkages are often triggered by changes in real US dollar interest rates or liquidity shocks, but these are quickly repaired, with fundamentals ultimately driving its movement.

This characteristic allows Bitcoin to demonstrate unique value during major events like geopolitical conflicts and financial crises.

In key events such as the US-Iran conflict in 2020, the US regional banking crisis in 2023, and the announcement of US tariffs in 2025, Bitcoin experienced brief market fluctuations but quickly rebounded with significant positive returns afterward.

During the US-Iran conflict, Bitcoin rose 26% over 60 days; during the US regional banking crisis, it increased 25%; and during the 2025 tariff announcement, it gained 23%. In contrast, traditional assets like the S&P 500 performed far worse during these events.

Even during extreme situations like the COVID-19 pandemic in 2020 and the Russia-Ukraine conflict in 2022, Bitcoin was able to recover quickly after short-term declines, demonstrating strong resilience.

The report analyzes that Bitcoin’s short-term irrational volatility stems from its 24/7 trading and real-time settlement features. During periods of tight liquidity in traditional markets, it is more prone to sell-offs. Additionally, the crypto market and investor perception are still immature. However, these short-term fluctuations do not overshadow its fundamental advantages.

Bitcoin has no traditional counterparty risk and is not dependent on any centralized system. Its long-term trajectory is driven by concerns over global currency stability, geopolitical stability, and the stability of US fiscal and political systems.

This logic is opposite to that of traditional risk assets, which is also the core reason why Bitcoin can serve as a “safe haven” during market panic.

It is important to note that Bitcoin, as a single asset, still carries risks such as high volatility, regulatory uncertainty, and an immature ecosystem. However, these risks do not significantly overlap with those of traditional assets.

Moderate allocation of Bitcoin can effectively improve risk-adjusted returns of a portfolio, diversifying fiscal, monetary, and geopolitical risks. This is also the core reason why it cannot be fully defined within the traditional “risk appetite / safe haven” framework.

Overall, while Bitcoin may show short-term correlation with traditional assets, its demonstrated resilience and returns during crises—especially amid increasing geopolitical tensions and global financial and political uncertainties—make it a scarce asset for hedging related risks in investment portfolios, with significant long-term diversification value.