Bitcoin Mirrors 2017 Surge as Geopolitical Tensions and Macro Forces Shake Crypto Market

The crypto market is undergoing a storm of macroeconomic momentum and geopolitical shockwaves, prompting analysts to draw parallels with previous bull cycles, most notably the landmark rally of 2017.

Raoul Pal, CEO of Real Vision and former Goldman Sachs executive, believes that the current environment shares "spooky" similarities to 2017, yet is also setting the stage for an even longer and more volatile crypto cycle, potentially stretching into 2026.

Simultaneously, escalating Middle East tensions, fueled by a sudden U.S.-Israel-led strike on Iranian nuclear facilities, have sent shockwaves through global markets.

The aftermath has triggered dramatic price swings in Bitcoin, Ethereum, XRP, and broader risk assets, while threatening global oil supply and further inflaming inflation fears.

Bitcoin’s Trajectory Echoes 2017, But the Cycle May Be Extended

According to Pal, Bitcoin's current market behavior eerily mimics the trend seen in 2017, when BTC climbed steadily throughout the year before its historic December breakout. In 2017, Bitcoin soared from $1,044 in January to $14,156 by December, a staggering 1,255% gain.

However, this time may be different. Pal emphasizes that macroeconomic indicators, especially his "business cycle score", signal we’re still early in the broader economic upcycle, and that could extend the crypto bull run for years.

“It’s spookily similar to 2017,” Pal said. “But this cycle could go longer, possibly into Q2 2026, especially with the weakening U.S. dollar acting as a tailwind.”

Indeed, since the start of 2025, the U.S. Dollar Index (DXY) has dropped nearly 9%, sitting at 98.77, making Bitcoin more attractive as both a speculative asset and a potential hedge against fiat debasement.

Macro Tailwinds and Institutional Adoption Fuel Market Optimism

Pal pointed out that macro forces, especially delayed interest rate adjustments and a stagnating dollar throughout much of 2024, have caused the crypto cycle to shift and potentially expand.

“The whole cycle got shifted because rates didn’t get adjusted,” he noted. “This looks more like 2020 than 2021, it feels like the earlier stages of a bull market.”

Meanwhile, the Middle East is rapidly emerging as a crypto hub. On a recent trip to the region, Pal met with several Sovereign Wealth Funds across Saudi Arabia, UAE, Bahrain, and Qatar. Their verdict?

“The mandate across the region is clear: AI and blockchain. Governments aren’t just investing in Bitcoin, they’re building entire infrastructures on the blockchain,” Pal reported.

This growing institutional interest suggests that long-term capital is entering the space, potentially cushioning crypto against the typical boom-bust patterns.

Chaos in the Middle East: War and Oil Choke Points Shake Crypto

However, just as macro tailwinds offered optimism, geopolitical tensions have rattled investor confidence.

On Saturday, the U.S., alongside Israeli forces, launched coordinated strikes on Iranian nuclear facilities in Fordow, Natanz, and Isfahan. In retaliation, Iran fired 27 missiles into Israeli territory, hitting targets in Tel Aviv, Haifa, and the Golan Heights.

The chaos reverberated across markets:

1. Bitcoin crashed to $100,945 within minutes of the announcement, shedding over $40 billion in market cap.

2. It later rebounded slightly to $102,350, but warning signs remain.

3. Ethereum (ETH) and XRP also suffered, falling to their lowest levels in weeks.

Technical indicators aren't reassuring either. Bitcoin is testing the $102K level repeatedly. A fresh "death cross" (when the 50-day SMA falls below the 200-day SMA) and tightening Bollinger Bands point to potential further volatility.

Strait of Hormuz in Focus: A Looming Economic Catastrophe?

Further compounding the market turmoil is Iran's potential move to block the Strait of Hormuz, a strategic waterway handling around 20% of global oil supply. According to reports, over 50 large oil tankers scrambled to flee the region following the U.S. strikes.

Market analysts, including JPMorgan, have warned that oil prices could surge to $130 per barrel, pushing U.S. inflation to 5%—levels not seen since early 2023. Such a spike could force the Federal Reserve to reconsider future rate cuts, tightening financial conditions and possibly triggering broader risk-off sentiment.

Crypto as a Safe Haven—or Risk Asset?

These events reinforce a growing debate: Is Bitcoin a safe haven, or merely another speculative asset?

In times of economic uncertainty, Bitcoin has historically attracted capital as a non-sovereign store of value. However, during acute crises, especially those with global military implications, it often reacts like a high-risk tech stock.

Still, some analysts believe these conditions set the stage for another breakout. Historically, long periods of consolidation, like the one Bitcoin is currently experiencing—have preceded parabolic moves.

Conclusion: A Battle Between Macro Optimism and Geopolitical Fear

The crypto market is currently walking a tightrope. On one side are powerful macro tailwinds, institutional adoption, and weakening fiat currencies, elements that mirror the bullish backdrop of 2017 and 2020.

On the other side lies geopolitical instability that threatens to short-circuit global markets.

With sovereign funds betting big on blockchain, and the global economy just beginning to recover, the longer-term outlook for crypto remains bullish.

But in the short term, expect turbulence as markets digest war headlines, oil price shocks, and uncertainty in the Strait of Hormuz.

As Raoul Pal put it, “The cycle’s not over—it might just be getting started.”