An Assassination in Tehran and What It Means for Bitcoin

February 28 was not a normal day in markets. A coordinated US-Israeli strike killed Iran’s Supreme Leader, and the immediate reaction played out the way these things usually do, briefly, before something stranger happened. Oil jumped, stocks sold off, but bond yields went up instead of down, which is not what you see when investors are simply looking for safety. Bitcoin dropped to $63,000 over the weekend and then climbed back toward $68,000 while equities were still sitting near their lows.

On-chain data told its own story. Crypto flows out of Iran spiked roughly 700% above the prior baseline in the two days following the strikes. The actual dollar figure was modest, around $10 million, but that number misses the point. What stood out was how fast it happened and what it resembled. A similar pattern showed up during Iran’s 2024 unrest, when people were not trading crypto so much as using it to get money somewhere the government could not easily reach.

The energy disruption is the part that makes the near-term picture complicated. Hormuz handles around a fifth of world oil consumption, and with shipping effectively frozen and insurers gone, Brent moved 13% higher inside a single week. That kind of jump adds to inflation at a time when US PCE is already running above the Fed’s target. Rate cut expectations got pushed further out almost immediately, with futures markets pricing the first likely move well into the second half of the year.

What kept the picture from being simply bearish was what the market looked like going into this. Futures open interest had already come down sharply from October highs. Funding rates were neutral to slightly negative. Between March 2 and 4, spot Bitcoin ETFs in the US took in nearly a billion dollars despite the average holder being deeply underwater. That is not how a market behaves when institutions are heading for the door.

After Ukraine in 2022 and the US banking stress in 2023, Bitcoin recovered sharply once the initial shock passed. The setup this time looks similar, though the duration risk around Iran is harder to call.

ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.

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