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Key Takeaways:
- A seed has been planted for bitcoin as a safe-haven asset in times of geopolitical stress: weekend donations, alternatives to bank runs, and hideouts from FX volatility have significant use-case
- Bitcoin has again rallied off the low $30,000s, closing at $41,655 at the end of February 2022
- Sparks seen on Thursday and Monday reflect the lessening of “overhangs” that will ultimately end in the rear-view mirror
- Amidst volatility, holding trends strengthen: 62% of circulating supply held greater than one year

The Focus
Last week, Russia launched a full-scale invasion in Ukraine, sending risk assets in a whirlwind of declines, reversals, and rallies.
It appears that a “sell the rumor, buy the news” event has occurred as bitcoin and risk assets bounced off lows seen overnight on Wednesday. Bitcoin hit a low of $34,337 just after the initial invasion, ultimately reversing higher to a close of $38,414 on the very same day (+12% from lows). Follow through occurred again on Monday with the asset closing at $41,655 or now 26% higher than the intraday lows of $32,970 prior to the January FOMC meeting.
Considering that the Nasdaq Composite has experienced the third-worst drawdown in the last decade, bitcoin has weathered a significant storm. The Nasdaq’s max drawdown of 18.8% compared to bitcoin’s max of 47.8% reflects that yes, bitcoin is down, but not out. The pullback is in “good company.”
Going back to 2021’s open of $28,996, bitcoin has tested and bounced sharply off intraday lows of $28,824 on June 22, 2021, $32,970 on January 24, 2022, and now $34,337 on February 24, 2022.
Each of these bounces and higher lows should remind investors that bitcoin is “here to stay.” Max drawdowns in the last three years range from 48% to 53% (see page two), and polarization between bulls and bears has been significantly reduced.
These sparks seen on Thursday and now Monday reflect the lessening of “overhangs” that have placed holds on the rallies of bitcoin, ether, and digital assets.
For investors that are on the fence and waiting for the “perfect entry,” we recommend a consideration of the following meme, which to us still reflects the very nature of many bitcoin investors:

Now with geopolitical uncertainty joining monetary uncertainty in the rear-view mirror, a “not all that bad” rally may be presented as participants ultimately realize that these concerns were “more bark than bite.”
Planting the Safe-Haven Seed
While recent volatility through this geopolitical turmoil illustrates bitcoin’s emerging nature, these events likely plant a seed for better trading throughout the next geopolitical turmoil event.
Just this past week, investors have learned:
- Bitcoin made it possible to send $19m in donations to Ukraine on the weekend when banks were closed
- Russian citizens, many of which opposed the invasion, were impacted by government decisions that ultimately led to bank runs and empty ATMs
- The ability to sanction through fiat is crucial to national and global security but can lead to significant volatility in emerging FX
Bitcoin is non-sovereign, apolitical, and uncensored- so why in the future, wouldn’t it be considered a safe-haven for geopolitical risk?
With Bitcoin, Volatility is Your Friend

While bitcoin’s 90D realized volatility has improved, it still averages 62% since the beginning of 2019.
This reflects the emerging nature of the asset class.
With an annual perspective, bitcoin has experienced an average 55% drawdown per year, but annual returns are positive in 9 out of those 11 years.
So while bitcoin draws down, it certainly recovers.
For those with long-term conviction, this provides many attractive opportunities to buy bitcoin “on-sale.”
Strong Holding Trends Amidst Volatility

Bitcoin continues to be purchased, removed from exchanges, and placed in custody to be held for long-periods of time.
This reflects the continued success of bitcoin as a “store of value.” Long holding periods validate the use-case and confidence around the ability to both hold and monetize value stored in bitcoin’s network.
As of last week, 62% of circulating supply has been held for longer than one year, nearing the all-time-high of 63% placed in Q3 ’20. 38% of supply has now been held for longer than three years.
Holding trends continue to improve.
Click here for the full PDF. As always, please reach out with any questions or comments.
Stay tuned,
Joseph Orsini, CFA
Director of Research