Bitcoin (BTC-USD) traded near $74,000 on Tuesday as strategists highlighted its relative strength despite market jitters amid the Iran war.
“Bitcoin and crypto markets have looked resilient in the face of the Middle East conflict, outperforming Gold and equity indices,” Bernstein analyst Gautam Chhugani wrote on Monday.
Since the Iran war broke out on Feb. 28, the world’s largest digital token has risen 10%. The S&P 500 (^GSPC) has declined 2% over the same period, while gold (GC=F) has dropped almost 4%.
Strategists point to exchange-traded funds (ETFs) inflows of $2.1 billion over the past three weeks due to increasing allocations through wealth managers and institutional funds, including pension and sovereign funds.
Additionally, digital asset treasury giant Strategy (MSTR) has been increasing its exposure, adding 66,231 tokens year to date at an average cost of around $85,000.
“We believe the combination of Strategy’s treasury model and ETFs have transformed Bitcoin’s ownership structure,” Chhugani wrote. “Bitcoin is building the most resilient capital base.”
The analyst argued that while bitcoin retail holders “have panic sold” in recent months, “long term holders remain resilient.”
Read more about bitcoin’s moves and today’s market action.
Bitcoin initially dropped to $63,000 when the Middle East conflict started but quickly bounced back. In the early hours of Tuesday, the token topped $75,000, its highest level since early February.
Despite the bounce, some strategists warned of volatility ahead.
“Geopolitical tensions continue to impact commodity flows, with limited activity through the Strait of Hormuz supporting higher oil prices,” Fundstrat head of digital assets Sean Farrell wrote.
“Rate cut expectations have been pushed out, and the upcoming Fed meeting is unlikely (my personal view) to deliver a dovish surprise,” he added.
Bitcoin has been in a so-called crypto winter since selling off from all-time highs north of $126,000 in October.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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