An analysis said that if the war escalates to the point where U.S. forces deploy ground troops to Iran, bitcoin (BTC) could swing like a risk asset in the initial shock rather than hold up like a safe haven.

On March 31 local time, blockchain outlet BeInCrypto said, based on betting flows on prediction market Polymarket and past war cases, that interest rates and liquidity conditions are more likely to drive cryptocurrency prices than the war itself.

According to the outlet, the market has already begun pricing in geopolitical risk. On Polymarket, some participants said to have correctly predicted the start date of the Iran war are increasing bets on a scenario involving a U.S. deployment of ground troops to Iran. One account, introduced as having "accurately predicted nine U.S. attacks," is reported to be placing large sums on related events through March 31.

The key is not the war but the macro environment it creates. BeInCrypto stressed that "the biggest impact is not the war itself, but how the war moves inflation and interest rates." If a ground war becomes reality, it is highly likely a chain could form from higher oil prices to higher inflation expectations, rising government bond yields and shrinking liquidity. This structure traditionally weighs at the same time on risk assets such as stocks and cryptocurrencies.

The first past case presented was the 2003 Iraq war. At the time, the U.S. stock market had already priced in a "war discount" before the outbreak of war. This refers to a phenomenon in which a country's economy, stocks and currency are valued below their actual value due to war or geopolitical conflict. But after the invasion, the worst-case scenario did not immediately materialise. Uncertainty eased, the S&P 500 rose about 4 percent and oil prices fell instead. Interest rates also fell, improving liquidity conditions, which supported the stock market rebound.

By contrast, the initial phase of Russia's invasion of Ukraine in 2022 looked different. U.S. stocks rebounded after a sharp intraday drop, but bitcoin fell about 7 percent to a one-month low. This shows that in the early "headline shock" period of the war, bitcoin traded not as a safe haven like gold but as a high-risk asset similar to tech stocks.

The outlet concluded, based on the two cases, that bitcoin's "war beta" could differ from gold. In the first 24 to 72 hours of a major war shock, headlines tend to dominate the market and bitcoin tends to move especially like a high-risk asset. Stock markets can rebound quickly even during war if fear positioning was excessive, but bitcoin is highly sensitive to liquidity and the conditions for a rebound may be more demanding, it said.

It laid out three future scenarios. First, if the conflict is short and limited, bitcoin could rebound after an initial drop as uncertainty is resolved. Second, if it escalates into a prolonged ground war, a high-rate, high-oil-price environment could persist, and downside pressure is likely to continue. Third, if it expands into a full-scale war, a global risk-off trend could strengthen, leading to a deeper correction.

Iran's tough stance is also a variable. Iran's Foreign Minister Abbas Araghchi (아바스 아라그치) said, "I do not trust the outcome of negotiations with the United States. The level of trust is zero," lowering the possibility of easing tensions. This could act as a factor that makes the market price in escalation risk more heavily than a short conflict.

The outlet assessed that "bitcoin is not an asset that simply responds to war news by rising, but is closer to an asset that reacts sensitively to changes in the interest-rate and liquidity environment triggered by war." It added that if an expanding ground war pushes up government bond yields and delays expectations for monetary easing, conditions unfavourable to the crypto market are likely to form in the short term.