Bitcoin is facing renewed short-term pressure from escalating geopolitical tensions, yet Bitwise Europe says history suggests extreme risk spikes often precede strong medium-term gains for the asset.
In its March 2 Weekly Crypto Market Compass titled “Bitcoin Under Pressure as Geopolitical Risks Rise – Why History Points to a Bullish Setup,” Bitwise said major Middle East conflict has weighed on prices but historically created favourable forward return profiles.
“Although bitcoin tends to trade lower in the short-term, geopolitical risks usually tend to mean-revert and decline to lower levels, which tends to provide a renewed tailwind over the medium- to long term,”
The report stated.
Bitwise noted that when the Geopolitical Risk Index rises into the top 20% of historical readings, bitcoin has often delivered above-average returns in the following month despite near-term drawdowns.
“This historical pattern has shown that the risk-reward has been positively skewed to the upside after major geopolitical risk events, although downside risks may remain in the short-term,”
The researchers added.
The firm linked this dynamic to typical macro responses to armed conflict, including higher fiscal spending and monetary expansion, conditions that have historically supported scarce assets during reflationary cycles.
Global crypto exchange-traded products recorded about $1.04 billion in net inflows last week, including $881 million into bitcoin vehicles, and Bitwise said that:
“If past reflation cycles are any guide, this may provide a potential macro tailwind for bitcoin and other major crypto assets for the remainder of 2026.”
At the time of reporting, Bitcoin price was $68,402.16.