Capital markets save their worst surprises for the weekend. On the night of February 28, the US and Israel struck Iran. By Saturday morning, supreme leader Ayatollah Ali Khamenei was dead and Iranian missiles were hitting targets across the Gulf, including the UAE. Oil markets were closed. Stock markets were closed. Gold was closed. What was open was Bitcoin and every tokenised market that now functions as the global economy’s overnight emergency room.
Everything sold off. Bitcoin dropped. Ether dropped harder. Altcoins dropped harder still. They hit the sell button.
But since that initial shock, something unusual has been happening. Even as equities continued to slide, Bitcoin stabilised and began to outperform. It climbed back above $73,000 while equities continued to slide, breaking a correlation with software stocks that had held for months. The BTC gold correlation has flipped positive for the first time in weeks, suggesting the market is starting to treat Bitcoin less as a tech proxy and more as something else entirely.
That shift is not just about macro correlations. It reflects a deeper rotation already under way: producers are being forced out, while allocators are moving in.
That something else is the use case that institutional adoption had buried: portable money.
If you are reading this from a country with a stable currency and no imminent threat of conflict, this sounds abstract. It is not abstract to an Iranian family watching a currency that has lost 96 per cent of its value over recent years. Converting to dollars under capital controls is expensive and dangerous. Converting to gold is possible but try fleeing a country with gold bars in your luggage and you will discover very quickly how portable it is not.
Bitcoin lets you carry your wealth across a border in your head and access it from any country with an internet connection. No government can freeze it, confiscate it or print more of it.
The paper market problem
So why had this use case been forgotten? Simple: institutional adoption. Just like gold, oil and silver before it, once a commodity with finite physical supply enters institutional markets, the first thing that happens is what the industry calls “paper”. Futures, options and collateralised lending create layers of synthetic exposure that make the physical scarcity of the underlying asset irrelevant in the short term.
That is what paper does. Once these derivatives exist and there is enough liquidity, the effect is unlimited synthetic supply. Over years, scarcity reasserts itself. Over weeks and months, paper sets the price.
This synthetic supply effect softened Bitcoin’s spot price throughout 2025 and into 2026.
Meanwhile, the miners began to capitulate.
Mara Holdings, the world’s largest publicly listed miner by holdings, filed with the US Securities and Exchange Commission in early March revealing it had rewritten its corporate strategy to permit selling Bitcoin from its balance sheet. Core Scientific announced plans to liquidate its roughly 2,500 BTC. Riot Platforms reported a $663 million net loss for 2025. JPMorgan estimates the average cost to mine a single Bitcoin at about $77,000, while the market price touched the low $60,000s.
When it costs more to produce something than you can sell it for, the economics are simple.
Producers out, allocators in
As the miners walked away, players who have never mined a single a single satoshi, a unit equal to one hundred millionth of a Bitcoin—the smallest of its kind— piled in
Strategy, the company formerly known as MicroStrategy, now holds more than 720,000 BTC, having bought another 3,000 just last week for $204 million. Galaxy Digital holds about 18,400 BTC and continues to accumulate.
If you have spent time around commodity markets, you will recognise this as a classic regime shift: producers exit because margins evaporated, allocators enter because the price is exactly where they want it.
Then came the announcement that changed the structural picture.
On March 4, Kraken Financial was granted a Federal Reserve master account, making it the first digital asset bank in US history with direct access to its Fedwire platform. Kraken can now settle dollar payments on the same rails as JPMorgan and Bank of America. Meanwhile, nearly 60 per cent of the top 25 US banks by assets are now either offering or planning Bitcoin related services.
Confirmation
Institutional traders call the current set-up “confirmation”. They do not buy falling assets just because they have fallen. What institutions wait for is a signal that, on the balance of probabilities, the bleeding has stopped and the risk reward has shifted.
Miners capitulating while allocators accumulate is one signal. Kraken securing Fed access is another. Bitcoin outperforming equities during a genuine geopolitical crisis is a third.
Nobody has a crystal ball. But the asymmetry from here is what matters. And in the background, a use case that the derivatives markets had almost smothered is reminding the world why it existed in the first place.
As always, position sizing is everything. A volatile asset will always be volatile. Selling the farm and going all in remains terrible risk management.
But for those who think in measured allocations and multiyear horizons, this is the kind of moment that tends to look obvious in hindsight.
Yevgeny Bebnev is an investment professional and multi-manager fund specialist based in Dubai. He is also the founder and CIO of Alaris Capital
