Fact or Fiction: Bitcoin Always Protects Your Wealth During Global Unrest

Those who see bitcoin as 'digital gold' expect protection when threats of war or political unrest affect financial markets. The currency is scarce, globally tradable, and not dependent on a single government or central bank.

In times of acute unrest, however, the price does not always behave like a safe haven. The time horizon is therefore crucial.

Why Some Crypto Investors Think This

There can never be more than 21 million bitcoins. Therefore, a government cannot simply increase the supply when debts or inflation rise.

Moreover, bitcoin can be stored without a bank account and sent worldwide. Or, of course, simply smuggled across borders on a USB stick.

This can make the currency attractive over several years when confidence in a national currency, bank, or government declines. From that perspective, bitcoin can protect part of the wealth against political and monetary risks.

But a safe haven must also hold value during acute panic. And this is where doubts sometimes arise among some, especially new investors.

What Do the Facts Say?

The price reaction on October 9 illustrates this. Fears of a U.S. attack on Iran coincided with falling cryptocurrency prices.

When President Donald Trump temporarily ruled out an attack, bitcoin rebounded. The currency thus moved in line with the fear.

The Covid crash of March 2020 is a stronger example. On March 12, bitcoin lost about 40 percent in one day. The Bank for International Settlements described an exceptional flight to cash. Investors even sold normally safe investments to get dollars.

The notorious crash of the bitcoin price when the Covid pandemic broke out. Bitcoin fell that day from nearly $8,000 to $4,600. Source: Tradingview

Within crypto, trading with borrowed money amplified the selling wave, something that has an even stronger effect today.

This caused new sales. Coin Metrics observed that mainly coins that had been bought shortly before were moving. Long-term holders sold relatively less.

Scientific research does not provide a single answer either. A study from 2025 saw bitcoin as a possible protection against geopolitically driven stock market declines. Other research found gold and the U.S. dollar to be more stable havens.

On days or weeks, bitcoin can therefore drop sharply when investors reduce risk. Over several years, scarcity can work in its favor, provided demand remains.

The Verdict

Partially true. Bitcoin can provide protection against certain political and monetary risks in the long term. However, it is not a reliable escape route during every geopolitical shock.

Multiple factors always play a role in price movements; bitcoin is new and is often still seen as a risky investment (which is why it is sometimes one of the first investments sold in major panic), many traders trade with borrowed money which can have significant effects on the price, and there are many other factors to consider that affect which direction the bitcoin price moves.

For true Bitcoiners, those short-term movements ultimately matter little. They look far ahead, sometimes generations into the future, with the idea that our current financial system will not stand the test of time.

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