Is Now the Time to Short Cryptocurrencies Before the US-Iran War?

The current situation is indeed tense: the third round of US-Iran negotiations in Geneva stalled on February 26th, with unsatisfactory results. The Trump administration has issued an ultimatum, and military forces are amassed in the Persian Gulf. Logically, with war imminent, risk aversion should push risk assets into a “grave,” but cryptocurrencies haven't crashed as you might expect. There are several underlying rationales behind this, let’s analyze:

1. “Bad News Fully Priced In” and Pre-emptive Digesting
Market principles are “buy the rumor, sell the fact.”
• Prolonged Downtrend: Since October last year through January this year, Bitcoin has already halved from its highs. The current tension isn’t new; the market has been pricing in war risk since January.
• Diminishing Negative Signals: When everyone has been discussing “possible conflict” for months, the real threat of war becomes the most resilient. Many institutions and long-term holders have already sold when it was time.
2. Narrative Clash: Risk Assets vs. Digital Gold
Cryptocurrencies are currently in an “identity crisis”:
• Short-term Performance: They behave like Nasdaq stocks, moving with liquidity, and war expectations are indeed negative.
• Safe-Haven Attribute: But don’t forget, in sanctions-hit and highly volatile regions (like Iran and surrounding areas), cryptocurrencies are the only channels for capital flight and cross-border payments.
• Institutional “Backstop”: Look at JPMorgan’s recent forecast—despite market declines, they still set a long-term target of $170,000. This institutional “faith” provides an invisible support cushion for the market.
3. The Potential Rebound Risk from “Buy the Fact”
If you’re shorting, the biggest psychological risk is when the “boots hit the ground.”
• Historically, many conflicts have seen risk assets “bottom out and rebound” at the moment fighting actually begins, because uncertainty disappears.
• If negotiations show even a slight “breakthrough” or “partial compromise,” large short positions like yours could turn into “fuel” for a rebound (short squeeze).

Personal advice: Shorting is essentially betting on “continued panic,” not on “war itself.” The market is currently in a state of “extreme suppressed volatility.” While bears are dominant, there’s no “avalanche liquidity” to make you instantly rich. Pay attention to position management and never go all-in on shorts when everyone expects a collapse. Sometimes, the market is even more resilient than human lives.