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Although many crypto investors flee to bitcoin ($BTC) as a safe haven, it hasn’t performed particularly well during times of war. Consider its underperformance against other tech investments during the onset of a conflict.
Despite US President Donald Trump’s 53 assurances that the Russia-Ukraine war would end “on day one,” that conflict continues.
Worse, a new war just started in Iran, giving us a recent example against which to analyze $BTC as an ostensible safe haven asset.
$BTC often correlates with the NASDAQ-100 index, the largest proxy for the tech industry. However, many military headlines have driven $BTC to decouple from the NASDAQ to the downside.
On Monday, for example, Trump surprised the world with a sudden post to TruthSocial asking everyone in Tehran to evacuate immediately. That plea, made at 6:30pm New York time to a metro area of over 15 million people, immediately tanked NASDAQ-100 constituents in after-hours trading.
The NASDAQ 100-tracking QQQ ETF, which had been trading north of $533.70 prior to the announcement, traded 0.15% lower within two minutes and 0.6% lower within 90 minutes.
Those percentages aren’t to be mistaken as insignificant. For an index as large as the NASDAQ — which itself is tied to the largest economy in the world — a loss of 0.6% reflects a loss of approximately $300 billion in US public market capitalization.
$BTC, however, fared far worse during the same period.
Prior to Trump’s announcement, $BTC was trading above $108,700. Within 90 minutes, it had declined 1.8%.
Indeed, $BTC fell 3X further than the NASDAQ within 90 minutes of conflict breaking out.
$BTC doesn’t seem to be a safe haven
The same effect of $BTC decoupling from the NASDAQ during wartime headlines occurred at the onset of the Russia-Ukraine conflict.
Late on the evening of February 23, 2022, Vladimir Putin announced a “special military operation” against Ukraine that, like Trump’s TruthSocial post this week, marked the de facto commencement of war.
By the NASDAQ 100’s 9:30am open of trading on February 24, 2022, the index had crashed a staggering 3.2%.
$BTC, however, performed even worse than this spectacular incineration of over $1 trillion in US public market capitalization. By the morning of February 24, $BTC had fallen over 10% below its high of the previous day.
Yet again, the episode illustrates $BTC underperforming the NASDAQ by a 3X multiplier.
Read more: No, California didn’t pass a law to seize your idle bitcoin
More examples of $BTC failing to buoy investors seeking a safe haven are plentiful. From the India-Pakistan crisis earlier this year to as far back as late-2010s incidents of military strikes in the South China Sea, $BTC hasn’t performed effectively as a hedge.
Instead, $BTC has often mirrored or even amplified the moves of risk-on assets during wartime crises.