Geopolitical tensions intensify, fueling Bitcoin: from a 6% decline to a rebound logic

21Shares strategist Matt Mena’s recent insights hit a key market shift: geopolitical tensions are driving investors toward Bitcoin. From last year’s negative growth to this year’s rebound, the logical chain is quite clear—when uncertainty in traditional financial systems rises, Bitcoin’s appeal as a “neutral” store of value becomes more prominent.

How Geopolitical Tensions Drive Bitcoin Up

The New Positioning of Safe-Haven Assets

Bitcoin is being redefined. Once labeled as a “high-risk investment,” it is now increasingly regarded by institutions as a safe-haven asset on par with gold and silver. The core of this shift lies in Bitcoin’s “neutrality”—it does not belong to any country, is not controlled by a single political system, and in the context of escalating geopolitical conflicts, this trait becomes an advantage.

When the US dollar faces geopolitical risks and liquidity in traditional safe-haven assets is constrained, Bitcoin becomes a new choice. This is not just a retail investor idea; data showing continuous net inflows into US spot ETFs indicates that institutional investors are also voting with real money.

Historical Cyclical Support

Here’s an often overlooked but very important detail: Bitcoin has never experienced two consecutive years of decline.

Last year, Bitcoin fell by over 6%, which doesn’t look great. But from a historical perspective, this actually sets the stage for a rise in 2026. Although the four-year cycle of Bitcoin has seen reduced volatility after institutional entry, its cyclical nature still exists. Usually, the year following a decline is a rebound year, a pattern validated across multiple cycles.

Market Performance Confirms the Trend

Current market data also supports this logic. As of January 6, Bitcoin’s price is around $93,759, up 1.11% in the past 24 hours and up 6.59% over the past 7 days. The gains may seem modest, but they are maintained against the backdrop of overall crypto market volatility.

More importantly, the flow of funds is telling. In the first week of 2026, US Bitcoin spot ETFs recorded nearly $459 million in net inflows, marking the first positive flow after two weeks of net outflows. Mainstream products like BlackRock’s IBIT and Fidelity’s FBTC continue to attract capital, indicating rising demand from institutional investors.

Bitcoin’s market cap has reached $1.87 trillion, accounting for 58.28% of the entire crypto market. This figure reflects Bitcoin’s absolute dominance in the crypto ecosystem and demonstrates its capacity to absorb large capital inflows.

Outlook for 2026

Based on current information, Bitcoin is expected to continue its rebound trend in 2026. Supporting factors include:

• Short-term geopolitical uncertainties are unlikely to be resolved, maintaining safe-haven demand;
• Historical cyclical support, with rebounds typically following years of decline;
• Continuous institutional entry, with stable fund flows into spot ETFs;
• Ongoing improvement of compliant products, further integrating traditional capital into the crypto ecosystem.

However, it’s important to note that this upward trend is not without risks. The market still faces macroeconomic uncertainties, policy changes, and other shocks. But from a trend perspective, geopolitical tensions fueling safe-haven demand indeed provide new growth momentum for Bitcoin.

Summary

21Shares strategist’s insights capture the essence of the current market: escalating geopolitical tensions are reshaping investor perceptions of safe-haven assets, with Bitcoin gradually moving from a fringe asset to a mainstream reserve asset. Combining last year’s 6% decline with historical cyclical patterns, the case for a Bitcoin rebound in 2026 is solid. Of course, how far this logic can go depends on the evolution of geopolitical situations and macroeconomic performance. The key now is to observe the sustainability of institutional fund inflows and whether Bitcoin can break new highs supported by safe-haven demand.