Bitcoin acts as a "barometer" of geopolitical tensions; will the market open on Monday with a return to risk appetite?

Bitcoin’s V-shaped reversal after the sharp escalation of tensions in the Middle East is being interpreted by some market participants as a positive signal for the global risk assets opening on Monday.

Academy Securities strategist Peter Tchir stated in a report that, as the only risk asset tradable over the weekend, Bitcoin has always been a barometer of market sentiment. Its rebound indicates that risk appetite is recovering. Meanwhile, oil prices have already priced in some geopolitical risks, providing further support for a risk-on market open on Monday.

As the US-Iran situation evolved, Bitcoin shifted from a “big drop” to a “big rally.” After news of Israel’s airstrikes on Iran, digital assets plummeted sharply, but markets quickly reversed course upward following official Iranian media confirming the killing of Khamenei. Bitcoin not only regained lost ground but also rose above levels prior to the outbreak of this conflict.

According to CCTV News, Iran’s Supreme Leader Khamenei was attacked and killed on the morning of February 28. Israel claimed that Khamenei and his senior aides, including Iran’s Defense Council Secretary Ali Shamhani and IRGC Commander Mohammad Pakpour, were all killed in the airstrike.

The report states that, he is optimistic about the market opening on Monday with a “risk appetite” mode. He pointed out that oil prices have risen from about $60 per barrel at the end of last year to $72 last Friday, with some conflict risk premiums already priced in by the market. Additionally, after the Iranian leadership suffered heavy losses, its strategic game logic has been disrupted—“Now it’s time to seek a decent ending.”

Bitcoin as a “Barometer” of Market Sentiment

The report notes that this is the third time in recent years that Bitcoin has served as a real-time barometer of market sentiment during major Middle East conflicts over a weekend. Each time, the initial reaction was sharp decline, but this time, the rebound was significantly stronger.

On April 13, 2024, Iran launched a large number of suicide drones against Israel. The conflict also occurred during the early hours of a Saturday when global markets were closed, and Bitcoin’s first reaction was a sharp drop.

From June 21 to 22, 2025, the “Midnight Hammer Operation” involved B-2 bombers carrying massive bunker-busters destroying three nuclear sites: Fordow, Natanz, and Isfahan. The timing again fell on a Saturday morning, and Bitcoin experienced another knee-jerk decline.

The key difference with these previous incidents is that: Bitcoin experienced a clear rebound after the sharp decline, ultimately trading above pre-event levels. The report interprets this trend as a “risk appetite” signal.

Oil Prices Have Priced in Part of the Conflict Risks

The energy market is a core variable in assessing the macroeconomic impact of this round of conflict. Academy Securities strategist Peter Tchir outlined multiple factors influencing oil prices in his report:

First, risks are partially priced in. Brent crude oil rose from about $60 per barrel at the end of last year to $72 last Friday. This increase includes US winter energy demand and some conflict risk premiums. This means that, by Monday’s open, market expectations have largely absorbed the “bad news” on oil prices.

Second, supply channels are not yet blocked. Tchir pointed out that there are no signs of the Strait of Hormuz or other key oil transportation routes being shut down. He said: if there is an opportunity for a step down, it would not affect the passage of these channels, which is a core premise for oil prices not to spiral out of control.

Finally, buffer inventories provide a safety cushion. Major oil-consuming countries hold ample reserves, and US inventories are also high. Therefore, short-term supply disruptions of about a week are expected to have limited impact. Based on these assessments, Tchir expects spot contracts to potentially rise to $80, but does not anticipate significant fluctuations in the forward curve.

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