Crypto markets bounced back Tuesday morning even as traditional assets faltered, with oil spiking on reports that Gulf states may join the conflict with Iran.

Bitcoin rose 3.1% to around $70,352, recovering from weekend lows below $68,000. Ether, solana, dogecoin, and XRP also climbed, gaining between 2% and 4%.

The surge followed a report from The Wall Street Journal that Saudi Arabia had agreed to grant U.S. forces access to King Fahd Air Base, reversing its prior stance against involvement in strikes on Iran. The United Arab Emirates reportedly made similar arrangements.

Direct participation by Gulf allies would significantly escalate the conflict, transforming it from a U.S.-Israel operation into a broader regional coalition—far beyond what markets had been anticipating.

Iran reinforced its hardline stance, denying any talks with the U.S., echoing Monday’s report from Fars News Agency. The Strait of Hormuz remains largely closed, with only minimal shipping passing through.

Traditional markets responded sharply: S&P 500 futures fell 0.5%, European equities were set to open 0.8% lower, Brent crude jumped 4% to around $104 per barrel, the U.S. dollar gained 0.3%, and gold dropped 1.5%, extending its longest daily losing streak on record.

Gold’s decline is striking for a safe-haven asset during a widening conflict. Analysts suggest forced selling from funds facing margin calls could be driving the drop, highlighting bitcoin’s relative stability—holding steady while gold plunges.

The five-day deadline set by Donald Trump for Iran expires Saturday, but Gulf involvement changes the outlook. A broader regional conflict would put energy infrastructure across the Gulf at heightened risk and likely increase market volatility.

Bitcoin is holding above $70,000 amid weakening traditional markets, leaving traders to watch whether its resilience continues or if the next round of headlines triggers further volatility.