Bitcoin (BTC) has demonstrated remarkable stability despite escalating military tensions between Israel and Iran. Macro investor Raoul Pal explained that Bitcoin's price movements are largely driven by global liquidity levels rather than geopolitical events. According to Pal, 89% of Bitcoin's price fluctuations correlate with changes in the global M2 money supply, which reflects the liquidity held by banks and financial institutions worldwide.
Recent conflict-related events, including an Israeli strike on Iranian energy infrastructure and subsequent fires at the South Pars gas field, caused oil futures to surge by over 7%, signaling heightened energy market concerns. However, Bitcoin's price shifted by a mere 0.02%, underscoring its minimal reaction to geopolitical unrest.
Pal emphasizes that while short-term volatility can occur during geopolitical crises, Bitcoin's long-term price trajectory aligns more closely with monetary policy and liquidity expansions. This perspective is reinforced by historical data showing Bitcoin's tendency to recover swiftly from conflict-driven dips once liquidity conditions normalize.
Furthermore, analysts note that the recent Israel-Iran tensions produced temporary price dips in Bitcoin and Ethereum but did not alter existing liquidity-driven trends. This highlights the limited influence of sporadic political disruptions on Bitcoin's valuation, offering investors a clearer framework focused on macroeconomic drivers over headline news.