Is Bitcoin The New Gold? How The US-Iran War Is Pushing Investors Towards Crypto

Last Updated:March 26, 2026, 16:18 IST

Bitcoin moved slightly up during the Iran conflict, but it was not stable. Gold, however, moved in a steadier way. This shows Bitcoin still reacts to global events, said an expert

The US-Israel-Iran war has jolted global markets, pushing oil prices higher, fuelling inflation concerns and triggering volatility in equities. As uncertainty deepens, investors are once again looking for safer places to park their money.

Traditionally, such moments drive flows into safe-haven assets such as gold, the dollar and government bonds. But this time, Bitcoin is in the spotlight, and is even challenging gold’s long-held status.

On March 23, Bitcoin briefly surged past $71,000, moving in tandem with equities after US President Donald Trump signalled a delay in planned strikes on Iran. Yet, the rally was short-lived, with sharp price swings underlining its inherent volatility.

Currently trading in the $69,500–$71,300 range, Bitcoin has seen significant fluctuations over the past 24 hours. With a market capitalisation of around $1.4 trillion and daily trading volumes hovering between $34 billion and $38 billion, activity in the asset remains high, even as direction remains uncertain.

“Bitcoin is slowly moving beyond the label of a pure speculative asset, but calling it a full geopolitical hedge is still a stretch. What has changed is the profile of the buyer. Earlier, Bitcoin was driven largely by retail enthusiasm and momentum trades. Now, institutional participation has increased, and that has given it some credibility as a portfolio diversifier during periods of macro uncertainty,” said Anirudh Garg, Partner and Fund Manager, INVasset PMS — a SEBI-registered portfolio management service provider in Mumbai.

Is Bitcoin Behaving Like A Safe Haven?

To understand the debate, it is important to define what a safe-haven asset actually is.

A haven is something that either retains its value or rises during periods of uncertainty. Gold has historically played this role because it is scarce, widely trusted, and not tied to any single economy. The US dollar and government bonds also benefit from global confidence and liquidity.

These assets are expected to provide stability when markets panic. The question now is whether Bitcoin can offer the same assurance.

“During the Iran tensions, Bitcoin showed a mixed reaction. It moved up slightly by around 3-5% at first, but it was not stable. We also saw swings of 5-10% in a short time, which shows uncertainty. In comparison, gold moved in a steadier way. This tells us that Bitcoin still reacts to global events, but not in a consistent manner. That is why many investors still prefer gold during such situations,” said Darshan Rathod, COO, Multyfi — an SEBI-registered stock market advisor.

On Myriad, a prediction market run by Decrypt’s parent company Dastan, sentiment around Bitcoin has turned noticeably bullish. Users now assign a 49% probability to the cryptocurrency rising to $84,000, compared to $55,000 — up from about 41% earlier in the day.

Bitcoin also rallied over the weekend as tensions in the Middle East entered their third week, with the upward momentum carrying into Monday. During early Asian trading, the world’s largest cryptocurrency touched $74,157, according to data from CoinGecko, before easing slightly to trade around $73,978 — up 3.1% for the day and over 9% for the week.

In contrast, gold, traditionally seen as a safe-haven asset during geopolitical uncertainty, has fallen by about 7% since the conflict began on February 28. Bitcoin, which had largely behaved like a risk asset in recent months, has gained around 11% over the same period, widening the performance gap between the two.

Why Bitcoin Is Considered Digital Gold

The argument rests on its fundamental design. Bitcoin has a fixed supply cap of 21 million coins, making it inherently scarce. Unlike fiat currencies, it is not controlled by central banks or governments, which protects it from inflationary policies.

Its decentralised and borderless nature also makes it attractive in times of geopolitical stress. During conflicts or sanctions, when traditional financial systems face restrictions, Bitcoin can be transferred across borders with relative ease.

There are precedents. During the Russia-Ukraine War, cryptocurrencies were used for donations and cross-border transfers. In countries facing currency crises, such as Turkey or Argentina, crypto adoption has surged as people looked for alternatives to unstable local currencies.

These factors strengthen the case for Bitcoin as a hedge against systemic risks.

Why Is Bitcoin Being Watched Alongside Gold Now?

Bitcoin remains highly volatile, often experiencing large price swings within short periods. This alone makes it less reliable than traditional safe havens, which are valued for stability.

It also tends to move in correlation with technology stocks and other risk assets. During periods of market panic, investors often sell Bitcoin alongside equities, rather than flocking to it as a refuge.

“Gold has been trusted for generations, but Bitcoin is getting attention because it is different. It is digital, global, and not controlled by any government. Its market size has crossed $1 trillion at peak levels, which shows growing acceptance. Investors are curious to see if Bitcoin can protect value during tough times like gold. Even if it works half the time, it can become an important part of portfolios in the future,” said Rathod.

Meanwhile, Garg said Bitcoin is being watched closely because it reflects much more than retail speculation. “With broader institutional ownership and easier access through regulated investment products in global markets, Bitcoin has started to enter mainstream asset allocation discussions. That means its reaction during wars, inflation scares or currency stress is now being treated as a signal, not just a sideshow.”

But he added that gold remains the default crisis asset as it has far lower volatility than bitcoin. Even though Bitcoin represents a “borderless, non-sovereign asset in a world”, its volatility during the current Iran crisis puts it “under the spotlight”.

What Are The Big Shifts In Investment Behaviour?

Younger investors are increasingly drawn to digital assets, often preferring them over traditional instruments like gold. At the same time, institutional participation in crypto markets is growing, with new financial products and regulated investment vehicles improving credibility.

This shift suggests that Bitcoin’s role in the financial system is evolving. It may not fully replace gold, but it is beginning to occupy a unique space, somewhere between a hedge and a high-risk asset.

“The biggest shift in investment behaviour is that investors are no longer relying on a single crisis template. Earlier, a geopolitical shock would usually mean a simple move into gold and out of equities. Now the response is more layered. Investors are increasing allocations to cash, money-market products, and short-duration safety assets while also keeping exposure to gold as a macro hedge,” said Garg.

Rathod pointed out that how people invest in India is “clearly changing”. “Monthly SIP inflows have reached around Rs 18,000-Rs 20,000 crore, which shows strong participation. Many people are moving away from fixed deposits toward mutual funds and equities. Younger investors are also exploring crypto and global investments. Digital apps have made investing easier, so decisions are faster. Overall, people are now focusing more on growth rather than just safety.”

India is among the world’s largest crypto markets, with a growing base of retail participants. As of early 2026, India is a global leader in crypto adoption, with an estimated 93 million to over 119 million crypto users, driven by high interest among Gen Z and millennials. Despite high 30% taxes on gains and restrictive regulations, the market is expanding rapidly, with user numbers projected to grow.

However, the government imposes a 30% tax on crypto gains, and the Reserve Bank of India has repeatedly flagged risks associated with digital currencies.

“The Indian government does not view Bitcoin primarily as a safe-haven asset. From a policymaker’s perspective, Bitcoin is still a volatile private asset that can create risks around capital movement, taxation, investor protection, and financial stability. That is very different from the way gold is seen. Gold may be volatile too, but it is deeply understood, widely held, and integrated into the formal financial system,” said Garg.

Bitcoin, on the other hand, raises policy concerns that go beyond price. Authorities worry about money laundering risks, regulatory gaps, retail mis-selling, and the possibility of private digital assets weakening monetary control if adoption becomes widespread. “There is also concern that many investors may mistake speculation for protection and enter without understanding the downside,” he added.

Homegrown crypto exchanges have also met with legal action in the country. WazirX, for example, saw its funds frozen and was investigated by the Enforcement Directorate (ED) last year.

This means that, for most Indian investors, Bitcoin is still closer to a speculative investment than a reliable hedge. While it may offer opportunities for gains, it also carries significant downside risk. Treating it as a substitute for gold or other safe assets could be misleading.

Should You Invest in Bitcoin During Uncertainty?

For beginners, the key is perspective. Bitcoin can play a role in a diversified portfolio, but it should not be seen as a guaranteed shield against market volatility. Its price movements are influenced by a wide range of factors, from global liquidity and investor sentiment to regulatory developments.

Experts often suggest approaching Bitcoin with caution, investing only a small portion of capital, and being prepared for sharp fluctuations.

“A beginner should be very careful with Bitcoin. It is best to start small, around 2-5% of the total investment. Bitcoin can fall 20-30% very quickly, so the risk is high. It should not be treated as a safe investment. Use trusted platforms and avoid short-term trading. Think long-term and learn slowly. It can be part of a portfolio, but not the main investment,” said Rathod.

Understanding the risks is just as important as recognising the potential.

“A beginner in India should approach crypto with discipline, not excitement. Do not treat Bitcoin as a shortcut to wealth. It should come only after building an emergency fund, basic insurance cover and core exposure to more stable assets like equities, gold and fixed income. For someone starting out, Bitcoin is usually the cleanest entry because it is the most liquid, most widely tracked and relatively less speculative than smaller tokens,” explained Garg.

The second rule is position sizing, he adds. Crypto should remain a small part of the portfolio, not the foundation of it. “A beginner is better off investing gradually through staggered buying rather than lump-sum chasing after rallies. Use only compliant platforms, maintain proper records and understand the tax implications before entering. Most importantly, never borrow to buy crypto. In India, the right way to approach Bitcoin is as a high-risk satellite allocation with a long holding horizon and strict risk control,” he cautioned.