Bitcoin surged above $71,000 on Wednesday, extending gains despite escalating geopolitical tensions in the Middle East, while US-listed spot exchange-traded funds (ETFs) attracted significant inflows.

The leading cryptocurrency by market value climbed to $71,047 at the time of writing, up more than 6% over 24 hours, according to CoinDesk data.

Other major tokens followed suit, with ether, XRP, and Solana rising between 4% and 6%.

The rally comes as the crisis in the Middle East intensifies, including reports of Iran blocking oil supplies through the Strait of Hormuz, raising concerns over global energy-price inflation.

Since the conflict involving Israel and the US erupted on Saturday, bitcoin’s downside has been capped around $65,000, suggesting resilience in the face of broader market uncertainty.

However, a New York Times report said Iranian intelligence operatives reached out to US to discuss offers for ending the conflict.

The report has put optimism back in the markets as S&P 500 futures gained 0.18% while Brent Crude slipped from $84 to $82.

US-listed spot bitcoin ETFs have seen renewed demand.

The funds recorded $225.2 million in net inflows on Tuesday, according to SoSoValue data.

BlackRock’s iShares Bitcoin Trust ETF (IBIT) led the gains with $322.4 million in inflows.

These offset $89.3 million in outflows from Fidelity Wise Origin Bitcoin Fund (FBTC) and $28.2 million from Grayscale Bitcoin Trust ETF (GBTC), according to Farside data.

This week’s total inflows have reached $683.3 million, following $787.3 million in inflows last week.

That marked the first positive week after five consecutive weeks of outflows totaling nearly $4 billion.

Separate data showed that US-listed spot bitcoin ETFs have attracted $1.4 billion over the past five days.

Since their debut in January 2024, the 11 spot ETFs have cumulatively registered inflows worth over $55 billion.

However, sentiment in the broader crypto market remains cautious.

The Crypto Fear & Greed Index fell to 10 on Wednesday after briefly recovering to 14, signaling “extreme fear,” even as bitcoin rebounded 5.4% over the past seven days.

While bitcoin funds recorded fresh inflows, ether ETFs slipped into negative territory, posting $10.8 million in outflows.

Funds tied to XRP and Solana remained in positive territory, with inflows of $7.5 million and $1 million, respectively.

The mixed flows reflect lingering uncertainty tied to geopolitical risks and oil price volatility. Asian equities have also been under pressure, reinforcing a cautious tone across risk assets.

American billionaire and hedge fund manager Ray Dalio criticized bitcoin on the All-In Podcast Tuesday, citing its limited privacy, potential quantum computing risks and small market size.

“I think Bitcoin has received a lot of attention, but as a form of money, it’s small compared with gold. There is only one gold,” he said.

Bitcoin advocates pushed back. Bitwise chief investment officer Matt Hougan said: “Some hear criticism; I hear opportunity.”

“These are the reasons Bitcoin is 4% the size of gold. If these critiques did not exist, Bitcoin would already be around $750,000 per coin. I invest in Bitcoin in part because I am confident these things will change over time.”

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