Performance Update

As of March 2026, Bursera Capital's total ROI is 562.91%* since the fund's inception in 2019, with Bitcoin standing at 556.88% and the average fund reaching 439.06%. Returns are 1.34%*, with the average fund reporting 3.77% and Bitcoin at 1.64%. Our Compound Annual Growth Rate (CAGR) is 32.81% with Bitcoin at 32.62% and the average fund at 28.75%.

EXECUTIVE SUMMARY

Since the outbreak of the U.S./Israel–Iran conflict on February 28, 2026, gold has declined 11.05%, the S&P 500 has fallen 5.1%, and the broader crypto market has shed over 17% of its total capitalization. Bitcoin has been the standout performer, rising 3.6%, buoyed by institutional ETF inflows. This letter examines the wartime market dynamics, the breakdown of traditional safe-haven narratives, and why Bitcoin’s resilience amid broad market weakness continues to reshape the investment landscape.

I. Wartime Market Overview: Performance Since the Outbreak

The U.S./Israel–Iran conflict, which escalated on February 28, 2026, triggered a broad risk-off liquidation across global markets. Gold, which had rallied sharply in January on geopolitical fears, reversed violently and has since declined 11.05% from its pre-conflict level. The S&P 500 has fallen 5.1%, with crypto-linked equities suffering far worse: Circle stock plunged 19%, Coinbase dropped 8%, and several recent crypto IPOs are down 50–80% from their listing prices (at time of writing).

Bitcoin has been a notable exception, rising 3.6% since the conflict began, buoyed by sustained institutional ETF inflows—though the path has included violent intraday swings exceeding 10% in both directions. Bitcoin’s positive performance in the face of broad market weakness underscores its evolving role as a distinct asset class, increasingly supported by institutional capital flows through regulated ETF structures.

Price Movement of BTC, Gold, and S&P 500 Since Outbreak of U.S./Israel–Iran War (Feb 27 = 0%)

Performance Since Conflict Onset (Feb 27 Baseline)

Our view: Bitcoin’s +3.6% return since the conflict’s outbreak is the strongest of any major benchmark tracked. It is outperforming gold (−11.5%) by nearly 15 percentage points, the S&P 500 (−5.1%) by nearly 9 percentage points, and the broader crypto market by more than 20 percentage points. The chart above tells the story: while gold and equities have struggled under the weight of geopolitical uncertainty and hawkish monetary policy, Bitcoin has carved out a positive return driven by sustained institutional ETF inflows. The divergence underscores Bitcoin’s evolving role in portfolios during periods of extraordinary stress.

II. The Safe-Haven Illusion: Gold’s Collapse and the “Digital Gold” Question

One of the most consequential narratives tested during this conflict has been the safe-haven thesis—for both gold and Bitcoin. The results have been striking.

Gold’s Bear Market: Not Your Grandfather’s Safe Haven

Gold has categorically failed to act as a safe haven during this crisis. Despite the most serious Middle Eastern military escalation in decades, gold has declined 11.05% since the conflict began and over 19% from its January all-time high of $5,508—decisively entering bear-market territory. As CryptoSlate reported, both Bitcoin and gold failed the traditional safe-haven test during this period, with markets prioritizing cash flow over safe-haven narratives as weekly shocks continued to accumulate.

Gold ETF outflows have been extraordinary. The SPDR Gold Shares fund (GLD) recorded its largest single-day outflow since 2016 on March 4, with $2.91 billion exiting in one session. iShares Gold Trust (IAU) saw outflows of $554 million on March 17 alone. Global gold funds lost approximately $5.19 billion in the week ending March 18. Investors appeared to use gold ETFs as a source of liquidity rather than treating them as a preferred refuge—a significant shift, given gold’s traditional role during geopolitical stress.

The Federal Reserve’s hawkish posture has been the key driver. With the Fed projecting the benchmark rate at 3.4% through end-2026 and trimming rate-cut projections from two to one, elevated real yields have raised the opportunity cost of holding non-yielding assets. The Bank for International Settlements noted in its March quarterly review that retail investors—not institutions—were the primary buyers of gold funds, while professional capital trimmed exposure or moved to the sidelines entirely.

Bitcoin: Resilient, But Volatile

Bitcoin’s +3.6% gain since the conflict is a notable result in absolute terms, outperforming gold, equities, and the broader crypto market. However, the path has been anything but smooth. BTC endured multiple swings exceeding 10% in both directions over the period, and its intraday volatility remained elevated throughout. The Bitcoin-to-gold correlation dropped to −0.88 on March 18—the most negative reading since the FTX collapse—confirming that the two assets are being treated as fundamentally different instruments.

Institutional flows have been the backstop. US spot Bitcoin ETFs recorded approximately $2.42 billion in net inflows over the four weeks ended March 20—the longest consecutive inflow streak of 2026 and the strongest since August–September 2025. CoinShares data shows Bitcoin exchange-traded products attracted $1.5 billion globally in March alone. As CryptoSlate reported, gold is being liquidated while institutional money continues to pour into Bitcoin through regulated ETF structures. The divergence is unprecedented.

Bitcoin’s +3.6% gain stands out against the backdrop of gold’s −11.05% decline and the S&P 500’s −5.1% drop, reinforcing the case that institutional flows through regulated ETF structures are providing a meaningful floor for Bitcoin even in acute risk-off environments.

KEY SIGNAL

Gold has entered a bear market (−11.05%) while Bitcoin ETFs drew $2.42 billion in net inflows over four weeks. Institutional capital is rotating out of traditional safe havens and into digital assets through regulated structures. Bitcoin’s +3.6% gain amid this turmoil highlights the structural shift underway in how capital flows during geopolitical crises.

III. Beating the Broader Crypto Market

While Bitcoin itself has posted a positive return since the conflict, the broader crypto market tells a very different story. The total crypto market capitalization has contracted by over 17%, and the dispersion between assets with institutional demand and those without it has been extreme. Tokens lacking strong ETF or institutional backing have dropped 60% or more. The Crypto Fear & Greed Index plunged to 14—deep in “extreme fear” territory.

On-chain data paints a sobering picture. Only approximately 57% of Bitcoin supply is currently in profit—a level historically associated with early bear-market conditions. Short-term holder cost basis sits near $70,000, creating a behavioral ceiling that has capped aggressive upside moves. Approximately 79,000 leveraged positions were liquidated for $153 million in a single recent 24-hour period, and aggregate liquidations have surged past $2.56 billion since the selloff began.

Crypto-linked equities have been particularly devastated. As reported by The Defiant, Circle stock plunged 19% and Coinbase dropped 8% after details emerged from the latest Clarity Act draft restricting stablecoin yield offerings. Recent crypto IPOs—including Bullish (down 52%), eToro (down 58%), and Gemini (down nearly 80%)—have been crushed. Bitcoin itself remains approximately 44% below its October 2025 all-time high of $126,000.

Bitcoin’s +3.6% return stands in stark contrast to this carnage. Its outperformance relative to the total crypto market (~20 percentage points), gold (~15 percentage points), and the S&P 500 (~9 percentage points) reflects the growing bifurcation between assets with institutional demand and those without it. Passive broad-market crypto exposure has been punished severely in this environment, while Bitcoin’s regulated ETF inflows have provided a critical floor.

IV. Macro Context: Oil, Rates, and the Path Forward

Oil remains the central variable driving cross-asset dynamics. The conflict triggered a roughly 20% supply shock in global energy markets, with Brent crude surging above $95 before partially retreating on de-escalation signals. The latest EIA outlook projects Brent should remain elevated for the next two months before declining below $80 in Q3 and toward $70 by year-end, assuming disruptions ease. Bank of America raised its 2026 Brent forecast to $77.50 per barrel, Standard Chartered moved to $85.50, and Bank of America outlined a tail-risk scenario of $130 oil in the event of prolonged supply disruption.

Higher oil prices have fed directly into inflation expectations. The University of Michigan’s early- March survey showed short-run inflation expectations rising from approximately 3.3% to 3.5%, with one-year gasoline price expectations jumping sharply. This inflation premium has kept the Fed on a restrictive path, with the March meeting signaling only one rate cut for 2026—down from two previously projected. Elevated real rates are the primary headwind for gold, and a secondary drag on risk assets broadly, though Bitcoin’s institutional ETF flows have thus far proven more resilient than expected.

Institutional Positioning: The Structural Bid

The institutional demand picture for digital assets remains constructive despite the volatile price action. Spot Bitcoin ETFs recorded four consecutive weeks of net inflows totaling over $2 billion—the longest streak of 2026. A January survey of 351 institutional decision-makers found that 74% expect crypto prices to rise over the next 12 months, and 73% plan to increase digital- asset allocations in 2026. The share of firms allocating more than 5% of assets under management to digital assets is expected to rise from 18% to 29% by year-end.

The retail–institutional divergence is notable. As the BIS documented, retail investors have been the primary buyers of gold funds, while institutions have been trimming gold and rotating into Bitcoin through ETFs and advisory channels. Bitwise flagged that gold has historically led Bitcoin by four to seven months, and the current divergence—gold entering a bear market while Bitcoin ETFs draw record inflows—may signal that a broader rotation from traditional stores of value into digital assets is underway.

V. Outlook & Positioning

The conflict-driven market dislocation has created both challenges and opportunities. Bitcoin’s +3.6% return since the outbreak—the best among every major benchmark tracked— demonstrates the resilience of institutional demand for digital assets, even as gold, equities, and the broader crypto market have suffered significant losses.

Three factors shape our forward view:

1. The geopolitical premium is beginning to compress. De-escalation signals, including the postponement of retaliatory strikes and the resumption of oil tanker transit through the Strait of Hormuz, have already triggered relief rallies. If the EIA’s projected oil path toward sub-$80 materializes in Q3, much of the current inflation premium should unwind, creating space for broader risk-asset recovery.
2. Institutional demand for Bitcoin remains structurally intact. ETF inflows have persisted through the worst of the crisis. The gold-to-Bitcoin rotation thesis, supported by a four-to-seven- month lag pattern documented by Bitwise, suggests capital exiting gold may eventually flow into digital assets. With 74% of surveyed institutions expecting crypto prices to rise and planning increased allocations, the structural demand pipeline has not broken down.
3. Active management earns its keep in volatile regimes. The wide dispersion in returns— between BTC and unsupported altcoins, between institutional-grade assets and speculative tokens—confirms that periods of dislocation are precisely when asset selection and risk management are most valuable. Bitcoin’s outperformance versus gold, equities, and the broader crypto market speaks directly to this principle.

BOTTOM LINE

Since the outbreak of the U.S./Israel–Iran conflict on February 28, gold has declined 11.05%, the S&P 500 has fallen 5.1%, and the total crypto market has lost over 17% of its capitalization. Bitcoin has risen 3.6%, sustained by institutional ETF inflows—the strongest performance of any major benchmark tracked. The safe-haven narrative has shifted: gold’s failure and Bitcoin’s institutional resilience are reshaping how capital flows during geopolitical crises.

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*Fund I (unaudited) was open from July 2019-2021 before the Fund was transitioned to the Cayman Islands. Cumulative return net of fees, between Bursera Fund I and the continuation Fund II. *Data from March 2026 subject to crystallization.