Crypto surges 8% since conflict began while S&P 500, Nasdaq, and gold slide 2-3%—is BTC the ultimate hedge in geopolitical turmoil?
MARKET INSIDER – As the U.S.-Israel war with Iran enters its third week, Bitcoin has emerged as a surprising outperformer, gaining roughly 8% since the conflict erupted on February 28, 2026—outpacing the S&P 500 (down over 3%), Nasdaq Composite (off more than 2%), and even gold (also down around 3%). The digital asset kicked off another winning week with a 5% gain by Friday’s close, much of it in a rapid 24-hour burst, highlighting its resilience amid escalating Middle East tensions that have hammered traditional markets through oil volatility and supply fears.
ProShares global investment strategist Simeon Hyman spotlighted this edge on CNBC’s “ETF Edge,” noting Bitcoin’s modest uptick against equities’ declines. “If you look at bitcoin, it’s up a little bit and equities are down [since the Iran war began,]” he said. “So, I think the diversification story really holds in this current environment.” ProShares, a major player in crypto ETFs including the recently launched ProShares CoinDesk 20 Crypto ETF (KRYP)—up nearly 5% over the same period—sees Bitcoin’s behavior reinforcing its role as a non-correlated asset when global risks spike.
Yet the rally comes with caveats: Bitcoin remains down more than 40% from its October 2025 all-time high of $126,198, trading in the low-to-mid $70,000s as of mid-March 2026 after an initial post-war dip and rebound. Main Management CEO Kim Arthur described it as a classic “crypto winter” bottoming phase, with the asset down over 50% from peaks when the war started. “I do like the fact that it’s outperformed a lot of other asset classes [since the war,]” Arthur said, while urging a longer lens—Bitcoin has delivered about 15% over the past five years but remains volatile and hard to beat consistently since 2021. He maintains a passive, benchmark-like approach to the cryptocurrency in portfolios.
This outperformance amid war-driven uncertainty—contrasting Bitcoin’s early sell-off with its subsequent recovery—underscores debates over crypto’s “digital gold” status versus traditional safe havens. While gold typically shines in crises, here Bitcoin has captured flows seeking asymmetric upside in a world of Hormuz disruptions and equity caution.
For global investors, Bitcoin’s edge in this conflict raises a provocative question: as geopolitical shocks become more frequent, could crypto’s volatility evolve into a strategic advantage for diversified portfolios? If the war de-escalates and energy stabilizes, BTC could extend gains—or face renewed pressure if risk-off sentiment returns. Either way, its recent strength challenges conventional wisdom, potentially reshaping how institutions allocate amid an era of persistent uncertainty. The diversification bet is on, but so is the risk of another sharp reversal.
