Bitcoin between geopolitics and oil: the digital market holds up amid macroeconomic uncertainty
12 MAR, 2026
By CoinShares
By James Butterfill, Head of Research at CoinShares
Over the past two years, digital asset markets have moved closely in line with expectations regarding interest rates. Today, however, this relationship appears to be weakening, with potentially positive implications for Bitcoin.
Recent U.S. employment data came in significantly below market forecasts. Expectations pointed to an increase of around 60,000 new jobs, while the actual figure showed a contraction of 90,000. In a more traditional market context, such a negative surprise would have triggered a substantial revision of expectations for rate cuts. This time, however, the market reaction was far more subdued. The temporary adjustment in expectations was quickly absorbed, leaving markets largely in the same position as before. This likely reflects a shift in the primary factor driving the pricing of global assets: it is no longer the labor market, but rather oil—and the current geopolitical crisis—that is influencing market dynamics.
Oil and Economic Growth: The Historical Lesson of Oil Intensity
Oil demand relative to U.S. GDP, long considered a predictive indicator of economic stress, has historically ranged between roughly 1% and 5% of GDP (from 1974 to the present). Currently, it sits slightly above 1%, a level that is historically low. What truly matters, however, is not the level itself but the speed at which it changes—the so-called oil intensity.
Rapid increases in oil demand relative to GDP have consistently preceded recessions: from the Yom Kippur shock in the 1970s, to the Iran–Iraq war in the early 1980s, and the near tripling of oil prices from $13 to $30 per barrel in the late 1990s.
Applying this historical framework to the current situation, if the average price of oil were to stabilize around $80 per barrel through the end of the year, the economic impact would likely remain contained. Conversely, an average price around $125 per barrel would generate oil-intensity dynamics comparable to those seen during the Iraq War, significantly increasing the probability of a recession.
It is impossible to predict how long the current crisis will last or what level oil prices may reach. The direction of risk, however, is clear: the longer the situation persists, the greater the accumulated damage to the economy.
The short-term effects on monetary policy are already evident. The probability of a Federal Reserve rate cut in June has dropped to about 23%, the lowest level recorded in this cycle. Inflation data (CPI) released yesterday, although in line with expectations, were almost immediately overtaken by events. They still reflected lower gasoline prices from before the crisis, while fuel prices in the United States have since risen by about 25%. The next inflation reading, scheduled for early next month, will fully reflect the impact of this increase.
Bitcoin as a Geopolitical Hedge
In a context marked by rising inflation risk, reduced expectations of rate cuts, and weaker growth prospects, one might reasonably have expected Bitcoin to decline. Instead, the opposite has occurred. Since the start of the crisis, Bitcoin has risen by around 6–6.5%, while gold has increased by roughly 1–1.5% and equities have fallen.
Several factors have aligned at the right moment alongside technical indicators that signaled proximity to a market bottom. Additional metrics, such as the MVRV ratio, suggested that Bitcoin was undervalued relative to its realized value.
Moreover, as the crisis intensified, a familiar pattern re-emerged: Bitcoin tends to perform well during geopolitical turmoil due to its characteristics as a non-sovereign asset immune to centralized regulation. The flight from U.S. Treasuries reinforces the idea that investor confidence in traditional safe-haven assets is under pressure, creating space for alternatives.
Notably, digital asset investment products have recorded inflows for three consecutive weeks—a meaningful signal that institutional investors are increasingly treating Bitcoin as an asset to hold during geopolitical turbulence, rather than one to liquidate.
Hybrid Finance and Bitcoin: The Structural Thesis Remains Intact
The current environment does not undermine the long-term structural case for digital assets. Segments tied to disposable income—such as speculative trading and meme coins—may face challenges if economic conditions tighten and household balance sheets come under pressure.
However, the political and regulatory momentum supporting stablecoin adoption, particularly in the United States, remains strong and largely insulated from the dynamics of the oil shock.
The thesis of hybrid finance—the convergence of traditional financial infrastructure with blockchain-based systems—continues to evolve along its own trajectory. Macroeconomic data have become less relevant as drivers of Bitcoin, while geopolitics has emerged as the dominant factor. For now, this transition is working in Bitcoin’s favor.
