Bitcoin Shows Resilience Amid Middle East Tensions, Outperforming Gold and Equities

Bitcoin has demonstrated notable resilience amid ongoing geopolitical tensions in the Middle East, holding up better than many market participants anticipated, according to Josh Gilbert, Market Analyst at eToro.

Despite remaining approximately 45% below its October all-time highs, bitcoin has consolidated within a US$65,000 to US$76,000 range. This stability comes despite a backdrop of surging oil prices, a stronger US dollar, and heightened global uncertainty—factors that would historically have exerted significant downward pressure on risk assets.
“Bitcoin’s ability to hold its ground in the current environment signals a clear evolution in the asset’s maturity,” said Gilbert. “Rather than experiencing sharp sell-offs, we’re seeing consolidation, which reflects stronger structural support and more diverse demand drivers.”

Interestingly, bitcoin has outperformed traditional safe-haven and equity assets during this period, including gold, the S&P 500, and the Nasdaq. While gold initially rallied on safe-haven demand at the onset of the conflict, it has since pulled back amid a strengthening dollar and rising bond yields.

“Gold has had an exceptional run this year, while bitcoin entered this period already significantly retraced. This dynamic helps explain why bitcoin has shown relative strength, while gold has given back some gains,” Gilbert added.

The current market environment also highlights the growing institutionalisation of bitcoin. Compared to previous downturns—such as in 2022, when bitcoin fell between 60% and 70%—today’s market is underpinned by stronger fundamentals, including the presence of spot ETFs, corporate treasury allocations, and sovereign wealth fund participation.

Recent data underscores this shift. Spot bitcoin ETFs recorded inflows of US$763 million last week, while Strategy continued its accumulation with a US$1.28 billion purchase. Additionally, more than 20 million bitcoin have now been mined, meaning over 95% of the total supply is already in circulation, further tightening supply dynamics.

“We are seeing a unique convergence where supply is becoming increasingly constrained while institutional demand continues to build,” said Gilbert. “This creates a structurally supportive backdrop for bitcoin over the medium to long term.”

Looking ahead, macroeconomic policy—particularly from the US Federal Reserve—will play a critical role in shaping bitcoin’s trajectory.

“If the Fed signals that oil-driven inflation will keep interest rates higher for longer, risk assets, including crypto, could remain under pressure,” Gilbert explained. “However, if there is room for rate cuts later in the year, the combination of tightening supply and renewed institutional demand could see bitcoin retest its highs.”

While near-term uncertainty remains, bitcoin’s current performance suggests a more mature and resilient asset class, positioning it differently from previous market cycles.