Bitcoin has been outperforming several traditional assets since tensions escalated in the Middle East, offering a surprising boost to sentiment after a turbulent start to the year for the digital asset.

The conflict involving Iran, Israel and the United States has shaken global financial markets. However, bitcoin has taken a different path. Since the hostilities began just over a week ago, the cryptocurrency has climbed roughly 3.5%, trading near $68,000.

In contrast, several major assets have declined during the same period. Gold has fallen about 5% and silver has dropped roughly 12%. U.S. equities have also weakened, with the Nasdaq-100 slipping around 1% and the S&P 500 declining approximately 1.5%.

The divergence has widened over the past 24 hours. Bitcoin advanced more than 2.5% while U.S. stock futures remained under pressure. Meanwhile, energy markets saw sharp volatility. West Texas Intermediate crude briefly surged to around $116 per barrel early Monday—at one point nearly 60% higher than when the conflict began. However, comments from leaders of the Group of Seven about potentially releasing strategic oil reserves helped cool the rally, pulling prices back toward $100 per barrel.

At the same time, demand for the U.S. dollar has strengthened. The U.S. Dollar Index rose more than 1% to slightly above 99. Government bond yields also moved higher, with the benchmark U.S. 10-Year Treasury yield climbing from just below 4% before the conflict to around 4.2%.

Bitcoin’s recent resilience comes after a steep correction earlier this year. Prices had dropped to around $60,000 following a slide from the record high above $126,000 reached in October. With market sentiment already fragile when the conflict began, many investors expected the downturn to deepen. Instead, the cryptocurrency has managed to recover, surprising many market participants.

Despite its outperformance, bitcoin continues to show some correlation with technology stocks. The iShares Expanded Tech Software ETF—a widely watched benchmark for software companies—has risen about 7% since the conflict began, rebounding from roughly $76 to close near $88 last Friday.

Derivatives data also suggests that the market may be stabilizing. Open interest in coin-margined bitcoin futures, which tracks contracts settled in BTC rather than dollars, has declined, indicating that excess leverage is being cleared from the system. Meanwhile, funding rates on perpetual futures remain negative at around –3.5%, meaning traders holding short positions are paying those with long positions—an indication that bearish bets remain crowded.

Another notable signal is the return of the Coinbase premium. This metric measures 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 renewed inflows into spot bitcoin ETFs, suggests institutional investors may be returning to the market and accumulating bitcoin at what they see as oversold levels.