Bitcoin is on track to close its strongest week since September 2025, rising about 8.5% and trading above $71,000. The gains stand out against broader markets, as bitcoin has climbed more than 13% since the Middle East conflict escalated, outpacing tech stocks, gold and U.S. equities. U.S. spot bitcoin ETFs have drawn roughly $1.3 billion in net inflows so far in March, potentially marking the first positive month for flows since October. Using BlackRock’s iShares Bitcoin Trust (IBIT) as a five-day proxy, IBIT is up roughly 3.5% and neared a one-month high on Friday.
This divergence suggests bitcoin is beginning to decouple from software and tech, at least in the near term. Since the onset of the Middle East conflict over two weeks ago, bitcoin has gained roughly 13%, outpacing traditional risk assets and safe havens alike. Over the same period, IGV rose about 3%, while gold fell roughly 6% and U.S. equities posted losses. Market participants have noticed rising demand from the United States, as institutional interest from the region appears to be returning.
US spot bitcoin ETFs have accumulated around $1.3 billion in net inflows this month, signaling a potential first sustained inflow period since October. Yet, the divergence does not imply bitcoin is out of the woods, as the market remains cautious and funding dynamics remain negative. The crypto fear and greed index has stayed in extreme fear territory. At the same time, perpetual futures funding rates remain negative.
Funding rates are periodic payments exchanged between traders in perpetual futures markets to keep contract prices aligned with the spot market. When funding rates are negative, short sellers pay long positions, indicating that bearish positioning is dominant and traders are willing to pay to maintain short exposure. While it may not mean bitcoin is all-clear to take off, it does show that investors aren’t pricing it as a purely risk asset anymore. As CoinDesk analysis showed, the move might just mean bitcoin has potentially become a 24/7 leading indicator of how the overall market might trade in response to a macro event.
The Middle East conflict is the perfect example of this, as the price moved before any other asset classes when the war first started. And now, it seems everything else is following its price action, while bitcoin remains steady.
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