Why Is Bitcoin Outperforming Traditional Assets During the Middle East Conflict?

Bitcoin (BTC) has excelled over gold and the S&P

Bitcoin (BTC) has excelled over gold and the S&P 500 (SPX) in terms of returns in the past month that the US-Iran war has lasted.

At present, BTC trades at $71,023, up 3.93% in the past day. Gold trades at $4,413, down 3.55% over the same period and in its worst week

Source: MarketWatch

These metrics flips when it comes to market cap, with the S&P 500 leading at $59.5 trillion, followed by gold at $30.62 trillion, and crypto at 2.43 trillion where $1.41 trillion is attributed to BTC.

Why BTC outshines traditional assets

Bitcoin has become the investment of choice for many due to its unprecedented and higher long-term ROI (return of investment).  In the past decade, the ROI for Bitcoin, the S&P 500 and gold was +15,355%, +289.7% and +125.8% respectively.

Its decoupling from traditional equities has also increased its appeal among institutions, with spot ETF adoption on the rise and Morgan Stanley recently joining the bandwagon.

Cryptocurrencies also boast 24/7 trading, censorship-resistance, portability and, for BTC, an inflationary edge due to scarcity – features that have rallied its adoption among the war ravaged nations of Ukraine, Russia and Iran.

That said, all financial instruments are subject to price changes due to the prevailing geopolitical tensions, and upcoming news regarding inflation, interest cuts and jobs reports.

For now, all three show “sell” or “extreme fear” sentiments, with liquidations spanning millions to trillions.

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