Why are both the U.S. dollar and crypto rising during the Iran conflict?

The Iran conflict has triggered inflation concerns due to surging oil prices, which is boosting the U.S. dollar while also supporting crypto demand. This is unusual because investors are not following the typical “safe haven” playbook of buying gold and Treasurys.

How has Bitcoin (BTC) and Ethereum (ETH) performed during the Iran crisis?

Bitcoin and Ethereum have both outperformed the S&P 500 in March, with Bitcoin rising to around $73,770 and Ethereum gaining to about $2,298. This suggests crypto is attracting flows even during geopolitical instability.

Why is the U.S. dollar strengthening right now?

The U.S. dollar is rising because markets expect fewer Federal Reserve rate cuts in 2026 due to inflation risks. Higher interest rates typically support the dollar by making U.S. assets more attractive to global investors.

Why aren’t gold and Treasurys acting as safe havens this time?

Gold and Treasurys are underperforming because rising inflation expectations are pushing bond yields higher and strengthening the dollar. A stronger dollar makes gold more expensive globally, reducing demand.

What role is oil playing in current market movements?

Brent crude staying above $100 per barrel is a key driver of inflation fears. Higher energy costs ripple through the economy, influencing interest-rate expectations and shifting investor behaviour across asset classes.

What does “stagflation risk” mean in this context?

Stagflation refers to a mix of slow economic growth and high inflation. In this environment, traditional investment strategies become less effective, which is why markets are showing unusual asset performance patterns.

How are interest-rate expectations affecting markets?

Markets now see a higher chance that the Federal Reserve will cut rates only once or not at all in 2026. This shift is pushing bond yields higher and supporting the dollar, while creating uncertainty across equities and commodities.

Why is crypto benefiting from geopolitical instability?

Crypto is gaining traction partly due to its borderless nature, which makes it useful during regional disruptions and displacement. In times of conflict, this accessibility can drive increased usage and demand.

Cryptocurrency

Image for illustrative purposes only. Not a real photo.

Dollar and crypto gain as gold lags in conflict

Written by Isaac FrancisPublished Mar 17, 2026, 12:00 AMLast Updated Mar 16, 2026, 11:41 PM

The U.S. dollar and cryptocurrencies have emerged as unexpected winners during the Iran conflict, while traditional safe-haven assets such as gold and Treasurys have underperformed.

The shift follows U.S. and Israeli strikes on Iran from Feb. 28, with elevated oil prices above $100 per barrel driving inflation concerns and reshaping investor behaviour.

“This is what happens when you have a conflict that triggers stagflation risk: It becomes difficult to trade it,”

Said ITC Markets strategist, Daniel Tenengauzer.

Rising inflation expectations have triggered a selloff in U.S. government bonds, pushing Treasury yields to their biggest two-week increase in nearly a year and reducing demand for fixed-income assets.

The stronger macro backdrop has also lifted the U.S. dollar, with the ICE Dollar Index climbing more than 2% this month as markets scale back expectations for Federal Reserve rate cuts.

Meanwhile, cryptocurrencies have gained ground, with Bitcoin rising about 3.1% to $73,770 and Ethereum up 7.9% to $2,298, outperforming a 2.7% decline in the S&P 500.

Stephen Innes of SPI Asset Management said policymakers may now prioritise inflation risks from an energy shock, reinforcing dollar strength and complicating the outlook for traditional safe-haven assets.

At the time of reporting, Bitcoin price was $74,397.73.