Just returned from Lebanon in the Middle East, my life was saved, but my account is a bit precarious.
Just now (2026.2.28), the United States and Israel launched a 'preemptive strike' against Iran. Gold instantly soared above 5000, what about Bitcoin? It dropped from 66k to 63k within 24 hours, a decline of 3-4%, and $514 million in long positions evaporated.
Someone started YYGQ again: "Wasn't it agreed that it would be digital gold? Shouldn't fighting be avoided? Is Bitcoin dead?"
1. Why does Bitcoin fall when there is fighting?
This question is actually not complex: In the asset framework of mainstream institutions, Bitcoin is still lying in the 'high risk' folder.
Volatility at 60% vs. gold's 15%, which institution would hold Bitcoin as a safe haven when missiles are flying? Their first reaction is always: sell the high volatility, hold cash, and wait to ask questions tomorrow.
This is not a matter of faith, but a mathematical result of risk control models.
History has played this out long ago: in 2022, when the Russia-Ukraine war broke out, Bitcoin fell 20%, while gold rose 5%; in 2024, when Israel entered Gaza, Bitcoin fell first as a sign of respect. Each time, someone shouts 'this time is different', yet it is always the same.
The 7x24 hour trading mechanism becomes an amplifier on weekends—traditional markets are closed, panic funds flood into the crypto pool for release, and leveraged longs face a chain of liquidations. Today's $500 million liquidation, $193 million came from Bitcoin, all standard technical accelerated drops.
Second, war may also benefit Bitcoin
However, if you just look at today's bearish candlestick and assert that 'Bitcoin is done for', you might miss another layer of logic.
This situation is quite special; if it escalates to the point of requiring US intervention, the script will change direction.
36 trillion in debt is there. Another prolonged war (like Iraq, Afghanistan) will push fiscal deficits higher, leading usually to one direction: the central bank printing more money.
The pandemic in 2020 was done this way: the government pumped money to stimulate the economy, where did the money come from? It was printed by the Federal Reserve. As a result, M2 (total money supply in the market) increased by 25%, and Bitcoin subsequently rose tenfold.
The market now expects 1-2 rate cuts in 2026, but if a war drives up energy prices while also pushing down growth, the Federal Reserve will face a dilemma—cutting too slowly harms the economy, while cutting too quickly harms inflation. Which way it leans is worth watching.
Three, if money printing really begins, why might funds flow into Bitcoin?
First layer: Bitcoin has a small market cap, easy to pump.
Bitcoin's total market cap is now $1 trillion, while Apple's alone is $3 trillion. The same amount of money coming in can create much bigger waves in Bitcoin than in Apple.
Second layer: there aren't many coins that can be sold.
On-chain data shows that 70% of Bitcoin hasn't moved for over a year. This indicates that most people are holding it, and if it really starts to rise, those who want to buy will have to pay a premium to get chips from these holders.
Third layer: there is no profit pressure, and there is no upper limit when it rises.
When stocks rise too much, someone will calculate: how much does this company earn in a year, is it worth this price? Bitcoin has no such thing; no one can put a ceiling on its valuation. When there is a lot of money, this type of 'unanchored' asset is most likely to go crazy.
But let's also pour a bucket of cold water: it can go crazy or collapse.
In 2022, the Federal Reserve's tapering (balance sheet reduction) led to a 70% drop in Bitcoin, while the US stock market only fell 20%. The other side of light assets is that when they run, there's no brake; don't just remember the gains but also the losses.
Four, there are still two hidden drivers today
Apart from war, the market today is also under two pressures:
Inflation data exceeds expectations: latest PPI 3.6%, interest rate cut expectations pushed back
Credit spreads widen: corporate bond spreads at their widest in four months, deleveraging is ongoing
Macroeconomic tightening + geopolitical panic + leveraged clearing, three forces acting simultaneously. Bitcoin's drop today is actually the result of multiple factors combined, not something that can be explained by a single reason.
Five, how do we see it now?
Short term: Geopolitical events are still fermenting, and market sentiment leans towards safe-haven assets, with cash and gold's defensive value online. Bitcoin may continue to be under pressure until the situation clarifies.
Medium term: watch 60k. If the conflict really reaches a point where monetary policy needs to step in, the script will change.
Long term: As long as fiat currency is still being printed, the logic of Bitcoin as a 'non-linear asset' remains intact. Short-term fluctuations are part of price discovery, not the end of the narrative.
Alright, I need to calm down the heart rate fluctuations caused by account volatility. What do you think about the direction of this conflict? See you in the comments.