The outbreak of war in the Middle East has rattled the global markets, however bitcoin has done something unexpected: outperform stocks.
Bitcoin has risen about 3.5% to $68,000 since the conflict between Iran, Israel and the United States began just over a week ago, according to CoinDesk data. Over the same period, it has outperformed most major assets. Gold is down about 5%, silver is down 12%, the Nasdaq 100 is down about 1% and the S&P 500 is down about 1.5%.
The divergence has widened over the past 24 hours, with bitcoin up more than 2.5% while US stock futures remain in the red. WTI crude briefly rose to around $116 a barrel early Monday, at one point up about 60% since the conflict began. However, comments from G7 leaders about the potential release of oil reserves helped cool the rally, with crude pulling back to around $100 a barrel. barrel.
Meanwhile, the US dollar has strengthened, with the DXY index up more than 1% to just above 99. Treasury yields have also risen, with the US 10-year yield moving from just below 4% before the conflict to around 4.2%.
Bitcoin’s outperformance comes after weeks of a brutal selloff that saw prices nearly halve to around $60,000 from a record high of over $126,000 in October. Since the mood was already fragile when the conflict began, many expected the downturn to deepen rather than reverse. Instead, the market has done what it often does best: catch the consensus off guard.
Tracking technology stocks
Despite bitcoin’s relative strength, it still shows correlation with tech stocks. The iShares Expanded Tech Software ETF ( IGV ), a widely followed benchmark for the software sector, is up about 7% since the conflict began after rising from around $76 to close Friday near $88.
Derivative market signals may point to stabilization. Open interest in coin-margin futures, which measure the total value of outstanding contracts settled in bitcoin instead of dollars, has fallen, indicating that leverage is being flushed out of the system. Funding rates, periodic payments between long and short traders in perpetual futures, remain negative at around -3.5%, meaning short sellers are paying longs, a sign bearish positioning remains crowded.
At the same time, the Coinbase premium has returned. This measures the price difference between bitcoin on Coinbase and offshore exchanges and is often used as a proxy for US institutional demand. Its comeback, along with spot ETF inflows, suggests that institutional buyers may return to the market and find demand at these oversold levels.
