JPMorgan says the war in Iran has created an unusual market split: Bitcoin is showing signs of safe-haven demand, while gold and silver, the traditional geopolitical hedges, have weakened under the pressure of outflows, profit-taking and deteriorating liquidity.
In one report On March 26, Nikolaos Panigirtzoglou and his team said Bitcoin has held up better than precious metals since the conflict escalated. According to the bank, gold is down about 15% this month, while gold ETFs recorded outflows of nearly $11 billion in the first three weeks of March. Silver has also come under pressure, with JPMorgan saying ETF inflows built up since last summer have now tapered off, even as bitcoin funds continued to post net inflows over the same period.
Bitcoin shows demand for safe havens
That difference is not just a price story. JPMorgan states that this is also visible in the positioning and market structure. Gold and silver had become very busy trades after a run that pushed gold near $5,500 an ounce and silver near $120 earlier this year.
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As interest rates rose, the dollar strengthened and investors de-risked, these positions began to weaken. The CME-based positioning shows a sharp decline in gold and silver exposure since January, while bitcoin futures have remained relatively stable in recent weeks.
The bank’s statement is more nuanced than a simple “bitcoin has replaced gold” story. Bitcoin was initially sold off along with other risky assets when the war broke out, briefly falling into the low $60,000 range before stabilizing again in the $60,000 to $70,000 range. JPMorgan’s point is that bitcoin did not behave like a classic safe haven during the initial shock phase, but recovered when flows returned, while gold and silver continued to lose support.
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JPMorgan also linked that relative resilience to the usefulness of crypto in a tense jurisdiction. “The deterioration in liquidity conditions in gold has narrowed its market breadth compared to Bitcoin at present,” the bank wrote.
In a separate summary of the same report, JPMorgan said: “The surge in Iranian crypto activity highlights the role of cryptocurrencies as a safe haven in countries experiencing economic and monetary instability and geopolitical stress.” The bank cited Chainalysis data showing that Iranian crypto activity increased after the outbreak of war, including transfers from domestic exchanges to self-custody wallets and international platforms.
That combination of borderless settlement, self-custody and 24-hour trading is the core of the bank’s argument. Bitcoin’s momentum indicators, which had fallen into oversold territory, are now moving back to neutral, JPMorgan said, suggesting selling pressure may be easing.
In contrast, gold and silver momentum shifted from overbought to down-neutral as liquidations accelerated. The bank’s liquidity work points in the same direction: gold’s market breadth has now fallen below that of bitcoin, while silver’s shallower depth has made the decline even more violent.
At the time of writing, BTC was trading at $68,597.
Featured image created with DALL.E, chart from TradingView.com