Bitcoin Outperforms Stocks and Gold as Middle East Tensions Shake Global Markets

Bitcoin has outperformed several traditional assets since the Middle East conflict escalated, offering a surprising boost to market sentiment after a difficult start to the year.

The outbreak of hostilities involving Iran, Israel and the United States has unsettled global markets. Yet instead of weakening alongside other risk assets, bitcoin has posted modest gains. According to market data, the cryptocurrency has risen roughly 3.5% to around $68,000 since the conflict began just over a week ago.

During the same period, many major assets have moved in the opposite direction. Gold has declined about 5%, silver has dropped roughly 12%, while equities have also slipped. Futures tied to the Nasdaq-100 have fallen about 1%, and the S&P 500 is down approximately 1.5%.

The gap widened further over the past 24 hours. Bitcoin climbed more than 2.5% while U.S. equity futures remained under pressure. At the same time, oil markets experienced sharp volatility. West Texas Intermediate crude briefly surged to about $116 per barrel early Monday—at one point nearly 60% higher than when the conflict began. However, remarks from Group of Seven leaders about potentially releasing strategic oil reserves helped cool the rally, with crude retreating to roughly $100 per barrel.

Meanwhile, the U.S. dollar strengthened as investors sought safety. The U.S. Dollar Index climbed more than 1% to just above 99. Government bond yields also moved higher, with the benchmark U.S. 10-Year Treasury yield rising from just below 4% before the conflict to around 4.2%.

Bitcoin’s relative strength comes after a steep correction earlier this year. Prices had nearly halved to around $60,000 from the record high above $126,000 reached in October. With market sentiment already fragile when the conflict began, many traders expected further downside rather than a rebound. Instead, the cryptocurrency has once again moved against the prevailing expectations.

Despite its outperformance, bitcoin still shows a degree of correlation with technology stocks. The iShares Expanded Tech Software ETF—a widely watched benchmark for software companies—has climbed roughly 7% since the conflict began, rebounding from around $76 to close near $88 on Friday.

Signals from derivatives markets also suggest conditions may be stabilizing. Open interest in coin-margined futures, which tracks the value of contracts settled in bitcoin rather than dollars, has declined, indicating that leverage is being reduced across the market. Meanwhile, funding rates for perpetual futures remain negative at about –3.5%, meaning traders holding short positions are paying those with long positions—an indication that bearish bets remain crowded.

Another notable development is the return of the so-called Coinbase premium. This metric tracks the price difference between bitcoin on Coinbase and offshore exchanges and is often used as a gauge of U.S. institutional demand. Its reappearance, along with inflows into spot bitcoin ETFs, suggests that institutional investors may be stepping back into the market and taking advantage of what they see as oversold conditions.