When U.S. and Israeli forces struck Iran on February 28th, Bitcoin trajectories behaved as previously witnessed in moments of crisis: a sell-off while gold surged and the dollar strengthened. With more than $128 billion in cryptocurrency market value evaporating, the market mavens pointed to an oft-repeated and often-validated truism — Bitcoin is a speculative risk asset, not a safe haven.

Six weeks later, that verdict seems to have been upended. While Bitcoin recovered and rose approximately 20% above its pre-conflict level, Gold fell nearly 20% from its post-conflict peak before pointing to a net recovery towards the pre-conflict level.

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Source: Leverage Shares analysis based on data from BTC.network, CoinTelegraph, Phemex, et al

The Mechanics of Flows

The sell-off during the opening of the conflict had a specific market rationale. During geopolitical shocks, institutional investors tend to abandon hedges in favour of raising cash. Bitcoin, which trades 24 hours a day, seven days a week, absorbed that selling pressure while gold markets were closed for the weekend. Once deliberate reallocation replaced panic liquidation, the picture reversed.

When Iran’s Revolutionary Guard (IRGC) announced that it had blocked the Strait of Hormuz through which one-fifth of the world’s oil moves, Brent crude surged above $100 per barrel. That inflationary shock was severe enough to push bond yields higher, thus making gold relatively less attractive as an investment. Bitcoin, whose investment thesis rests not on yield comparisons but on a fixed supply of 21 million coins, benefited from exactly the dynamics that hurt gold.

Institutional buyers used the initial panic to accumulate allocations into Bitcoin ETFs. The pattern — sell first, buy the dip, hold through the noise — is characteristic of long-term institutional positioning, not retail speculation. Bitcoin exchange-traded funds attracted more than $5 billion in net new capital between March and May while gold ETFs lost $11 billion in March 1–21, 2026.

Source: Leverage Shares analysis based on data from CoinDesk Markets, et al

Outflows from gold continued through March until partial data as of mid-May saw net inflows nearly at scale into both Bitcoin and gold ETFs.

A major factor behind Bitcoin’s volatility – at least among retail investors – in the midst of the conflict were reports of cryptocurrency seizures executed by the U.S. government. A closer look, however, indicates that these reports weren’t quite what they seemed to be.

The “Crypto Censorship” Narrative

Two distinct events that occurred during the conflict with Iran have so far been seemingly conflated into a single narrative on the security of cryptocurrencies. The first occurred in June 2025 during the 12-day war against Iran by the U.S. and Israel when the Israel-linked hacking group Gonjeshke Darande (“Predatory Sparrow” in the Farsi language) claimed to have destroyed data at the state-owned Bank Sepah and rendered inaccessible over $90 million in digital assets (mostly Bitcoin, Ethereum, and Tron) from Nobitex, Iran’s largest cryptocurrency exchange, by storing it in wallets with names denouncing the IRGC and inaccessible by Iranian authorities.

The attack on Iran’s crypto ecosystem had a certain strategic logic: since the imposition of sanctions, Iran progressively integrated the utilization of crypto into its strategic priorities. In Q4 2025 alone, IRGC-affiliated addresses were estimated to have moved more than $3 billion¹ to support the sales of commodities and oil, launder money, transfer funds and arms to Iran’s regional proxies, and purchase dual-use technology. Over the years, the IRGC is estimate to account for at least half of all Iranian crypto activity.

Source: Chainalysis. Image redesign by Leverage Shares

Furthermore, this estimate is deemed to be at the more conservative end, given the likelihood of address as of yet uncovered.

In April 2026, the US Treasury continued the alleged Israeli-origin attack on Iran’s crypto infrastructure by freezing what it described as $344 to $500 million in cryptocurrency linked to Iranian state operations. On the face of it, these two incidents served to create the notion that Bitcoin isn’t necessarily as censorship-resistant as previously claimed.

However, this isn’t necessarily true and both events need to be taken in consideration individually. The June 2025 event was an exchange security failure, not a Bitcoin failure. The exchange’s cold storage remained intact; only its hot wallet, i.e. the online accounts used for day-to-day operations, was compromised. The April 2026 action was mostly on Tether –a stablecoin pegged to the US dollar and issued by a private company – and not Bitcoin.

Analysis by various sources indicate that Iranian government networks mostly deal with stablecoins given its easier fungibility with fiat currencies to generate the physical cash the regime’s various organs need. What was seized was mostly stablecoins and what was hacked was an exchange’s operational accounts. Bitcoin’s protocol, meanwhile, ran uninterrupted throughout.

While the Iranian government’s crypto operations mostly relied on stablecoins that could be frozen, a fact pattern that is arguably more compelling was the crypto activity by Iranian civilians. In the face of 40-50% annual inflation, roughly one in six Iranians use Bitcoin², with annual transaction volumes growing 11.8% year-on-year and now representing around 2.2% of Iran’s GDP.

Source: Chainalysis. Image redesign by Leverage Shares

Bitcoin usage spiked predictably around every Iranian crisis event, with on-chain data showing sharp increases in self-custody withdrawals during protests, conflicts, and internet blackouts.

Bitcoin and Gold, Going Forward

The Iran conflict provides arguably the clearest evidence to date that Bitcoin has developed into a hybrid macro asset — not a pure safe haven like gold, but not a pure risk asset like technology stocks either. Bitcoin hasn’t replaced gold. Instead, it has joined it on somewhat different terms, with somewhat different properties, in an expanding universe of macro hedges for a world that is far from the U.S.-led global economic order, now increasingly rendered asunder by unilateral actions with dismally low global consensus.

For institutional allocators, the strategic implication is straightforward: the geopolitical risk premium previously captured exclusively by gold is now partially contestable by Bitcoin, particularly for investment horizons beyond the first week of a crisis. With the rise of unilateralism being established as precedent by the Trump administration and mostly validated by the inaction of its European allies, the need for alternatives beyond Western-centric institutions and frames becomes more relevant. The Bitcoin protocol — with its distributed network validating transactions and maintaining the ledger — has no single point of control and, thereby, ostensibly outside any single government’s control. As the Iran experience shows, the impetus will be on secure infrastructure; the protocol itself has been validated for increased “coercion-resistant” adoption.

Professional investors might consider the +3x Long Gold ETP (GLD3) and the -3x Short Gold ETP (GLDS) for magnified exposure to the price of gold during bullish and bearish trends respectively. Also at hand are the +3x Long Gold Miners ETP (GDX3) and the -3x Short Gold Miners ETP (GDXS) for exposure to the gold mining sector in similar terms. The +3x Long Silver ETP (SLV3) and the -3x Short Silver ETP (SLVS) are at hand for magnified exposure during bullish and bearish trends in silver.

Also available for consideration are the +3X Long Bitcoin ETP (SIX: BTC3; SEDEX: LBTC3L) and the -3X Short Bitcoin ETP (SIX: BTC3S. SEDEX: LBTC3S).

Footnotes:

“Crypto Crime in 2025 Was Primarily Driven by 694% Surge in State-Driven Sanctions Evasion Volume”, Chainalysis, 5 March 2026
“Bitcoin is predictably popular in crisis-ridden Iran”, CoinShares, 2 April 2026

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