Market update | March 13th, 2026

Bitcoin’s case is strengthening in the wake of this geopolitical turmoil

For much of the past two years, digital asset markets have traded largely in line with expectations around monetary policy. Bitcoin in particular has been closely tied to shifts in interest rate expectations, especially those relating to the Federal Reserve. That relationship now appears to be weakening. Instead, geopolitical developments, particularly those affecting the oil market, are beginning to play a more dominant role in shaping global asset prices. Somewhat counterintuitively, this shift may prove constructive for Bitcoin.

Last week’s US payrolls report illustrates this dynamic. Market expectations were for roughly 60,000 new jobs, yet the actual figure showed a decline of around 90,000. In most recent macro environments, a surprise of that magnitude would have triggered a meaningful repricing of rate cut expectations. While there was an initial reaction, the move quickly reversed and markets returned to their previous positioning. In our view, this muted response reflects a broader shift in investor focus. Rather than labour market data, attention has turned toward developments in energy markets driven by geopolitical tensions.

Recession risks loom amid oil price uncertainty

One framework we use to assess the economic impact of oil prices is oil demand as a share of US GDP. Historically, this ratio has ranged between roughly 1% and 5% since the 1970s. Today it sits slightly above 1%, which is historically benign. However, the level itself is less important than the speed at which it changes. Rapid increases in oil’s share of economic output have consistently preceded periods of economic stress. This pattern was evident during the oil shocks of the 1970s and during other periods when oil prices rose sharply over a short timeframe.

Applying this framework to the current environment suggests that moderate oil prices would likely have limited macroeconomic consequences. If oil were to average around $80 per barrel through the remainder of the year, the economic impact would probably remain manageable. However, a sustained move toward $125 per barrel would produce dynamics similar to previous geopolitical oil shocks and materially increase recession risks. While it is impossible to forecast how long the current tensions will persist or where oil ultimately settles, the direction of risk becomes more negative the longer the situation continues.

These developments are already influencing expectations for monetary policy. The probability of a Federal Reserve rate cut in June has fallen to roughly 20%, the lowest level seen during this cycle. Inflation data is also becoming harder to interpret. Recent CPI figures were broadly in line with expectations but still reflected gasoline prices prior to the recent surge in oil. US pump prices have already risen by roughly 25% since the geopolitical tensions intensified, meaning upcoming inflation prints may show renewed price pressures.

Bitcoin continues to show resilience

Despite this backdrop of rising inflation risks, reduced expectations for rate cuts, and a more fragile growth outlook, Bitcoin has demonstrated notable resilience. Since the onset of the geopolitical tensions, Bitcoin has risen by roughly 10%, while equities have declined and gold has posted only modest gains. This divergence is noteworthy.

Technical indicators had already suggested the market was approaching a cyclical bottom, while valuation measures such as the MVRV ratio indicated Bitcoin was trading below its realised value. At the same time, geopolitical uncertainty appears to have revived one of Bitcoin’s defining characteristics: its status as a non-sovereign asset operating outside traditional financial systems.

Flows reinforce this interpretation. Digital asset investment products have now recorded three consecutive weeks of net inflows with inflows totalling US$1.4bn since the Iran crisis began. The persistence of inflows suggests institutional investors are willing to maintain exposure to Bitcoin during geopolitical turbulence.

Taken together, these developments point to a subtle shift in market drivers. Macroeconomic data is becoming somewhat less influential in shaping Bitcoin’s behaviour, while geopolitics and energy markets are assuming a larger role. For now, that transition appears to be working in Bitcoin’s favour.