Why Bitcoin falls short as a safe haven in geopolitical turmoil - marketplace-tech Recap
Podcast: marketplace-tech
Published: 2026-03-12
Duration: 8 min
Guests: Gil Luria
Summary
Bitcoin, despite its fixed supply and independent existence from government control, is not perceived as a safe haven like gold during geopolitical crises due to its volatility and association with illicit activities.
What Happened
Bitcoin has often been compared to gold, given its limited supply and independence from fiat currencies. However, during geopolitical crises, Bitcoin does not behave like a traditional safe haven asset such as gold. For instance, while gold surged after the U.S. attacked Iran, Bitcoin did not experience the same immediate flight to safety.
Gil Luria, head of tech research at DA Davidson, explains that Bitcoin's volatility and its association with illicit activities have contributed to its perception as an unsafe asset. Over the years, Bitcoin has been linked with shady behavior, and its price has been subject to daily fluctuations unlike the relatively stable rise of gold.
Despite these challenges, Bitcoin remains attractive because it operates outside traditional financial markets. Its value is driven solely by demand and it is tradable 24/7 globally, providing liquidity at any time. This makes it appealing to those looking to trade or utilize it for technological applications like cross-border payments.
In the context of geopolitical instability, Bitcoin's popularity in places like Iran can influence its demand. If wealth starts escaping from volatile regions, there could be increased movement and demand for Bitcoin as a means to transfer wealth abroad.
Bitcoin enthusiasts argue that it could serve as a hedge against inflation, especially when government currencies depreciate. The fixed supply of Bitcoin and its global usage potential make it an attractive alternative to traditional money, especially in high inflation scenarios.
However, Bitcoin's role in countries with capital movement restrictions, like China, highlights its utility in moving wealth out of restrictive jurisdictions. It remains a tool for entrepreneurs and wealthy individuals in such regions to transfer their assets undetected by governments.
Key Insights
- Bitcoin's volatility and its link to illegal activities make it unreliable as a safe haven during geopolitical crises, unlike gold, which surged after the U.S. attacked Iran.
- Bitcoin operates independently of traditional financial markets and is tradable 24/7, attracting those who need liquidity and global trading capabilities, especially during geopolitical instability.
- In countries with strict capital movement restrictions like China, Bitcoin provides a discreet way for entrepreneurs and wealthy individuals to transfer assets out of governmental reach.
- Bitcoin enthusiasts see it as a hedge against inflation due to its fixed supply, making it an appealing alternative in high inflation scenarios where government currencies lose value.
Key Questions Answered
Why does Marketplace Tech say Bitcoin is not a safe haven during geopolitical crises?
Bitcoin is considered volatile and is associated with illicit activities, which contributes to its perception as an unsafe asset compared to gold during geopolitical crises.
What role does Bitcoin play in countries with capital restrictions, according to Marketplace Tech?
Bitcoin is used as a mechanism to move wealth out of countries with capital restrictions, such as China, by buying Bitcoin and using it to acquire assets elsewhere.
How does Marketplace Tech explain Bitcoin's appeal as an inflation hedge?
Bitcoin's fixed supply and independence from government control make it an attractive hedge against inflation, as its value can increase when traditional currencies depreciate.