Digital assets during times of great geopolitical uncertainty

March 2026

Dear Investors,

As the Iran war now dominates narratives and drives markets, we look at digital assets and their performance during these times.

Immediate aftermath of the war: Crypto incredibly resilient

Crypto assets, led by Bitcoin, exhibited positive performance during the initial oil price shock of the first week of the Iran conflict. This stands in contrast to the recent historical positive correlation with tech equities, and it serves as a reminder that among factors driving assets such as Bitcoin, are indeed attributes associated with pure safe havens during extreme geopolitical dislocations.

We continue to believe that investors should carefully dissect the short-term effects of an asset class vs its long-term potential. As for digital assets, we believe that they are likely going to remain correlated to the broader technology sector whilst at the same time still representing a truly “alternative asset” during massive geopolitical unrest.

What if prolonged inflation returns

There is increasing anxiety about inflation returning, or at least not falling materially. US breakeven rates are already reflecting that, and the interest rate cut expectations for this year in the US have been materially lowered.

This debate is reminiscent of 2022 when crypto was deemed to be “failing” its purpose of being a true diversifier against inflation. We want to revisit that point and highlight what most investors and commentators are getting wrong.

When we look at the recent (and admittedly short) history of bitcoin’s performance during episodes of rising inflation we make a few important observations:

1. First, time frame matters: during the 2022 debate, what was often missed is that true believers of the crypto as inflation hedge alternative pounded the tables way ahead of inflation actually showing up in the numbers. And anyone who followed the advice at that time, would have indeed experienced a very successful inflation hedge using crypto assets

2. Crypto (Bitcoin) leads markets by 6-9 months

3. When inflation shows up in the data, most of the performance has already materialized

4. Lastly, of course, there is volatility, and every time was slightly different, but the overall path was the same in every instance

What if economies roll over due to prolonged oil crisis

Historically, we have seen economic damage during episodes of significant rise in oil prices of over 100%, and for a prolonged period. We are not there yet.

For example, during the 1973 Arab Embargo, oil prices had risen ~300%, which subsequently led to over -15% correction in the S&P500. During the Iranian Revolution, oil had risen by over 150% while S&P500 corrected by over -10%.

Today, oil is only up approximately 45%.

However, if the conflict continues far beyond April (which is currently deemed the tipping point in terms of supply disruptions due to lag times), then the risk of sustained economic damage becomes more prominent.

In that event, we would expect the following (simplified) scenario:

1. Global stock markets, but predominantly Asia, would experience material drawdowns

2. Digital assets could become collateral damage as investors need to clear inventory to raise liquidity

3. In a second phase however, central banks and governments would be forced to react and provide support, leading to easing financial conditions and supporting risk assets again

4. Digital assets would be the first and fastest to react (as they always are).

From a portfolio management perspective, we will use those situations to build additional allocations and tactically take advantage of those opportunities. In fact, in our active strategies, we are repositioning portfolios such that we have the necessary capital to deploy when that happens.

If you would like to discuss any of our current market observations, please reach out to us via email.

info@matrixportam.com

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This is an advertising document. This material has been prepared by Matrixport Asset Management AG for informational purposes only for the sole use of the intended recipient. It does not seek to make any recommendation to buy or sell any particular security or to adopt any specific investment strategy. This document does not contain information material to an investor’s decision to invest in a product. The information should not be regarded by recipients as a substitute for using their own judgment. Neither Matrixport Asset Management AG nor any of its affiliates, or their directors, officers, or employees, accepts any liability for any loss arising from the use of the information in this document. Data therein should not be relied upon as such information is subject to change, without notice, at the discretion of Matrixport Asset Management AG at any time. Investors in crypto assets are subject to the risk of total loss of the amount invested. Crypto assets are highly volatile and may fluctuate extremely in a short period of time. Crypto assets may become illiquid depending on trading platforms or investment product. Therefore, crypto assets are high-risk investments and you should not invest in this asset class unless you understand and can bear the risks involved with such investments. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

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