The Middle East is becoming a much bigger crypto market and war is now part of the story. Middle East crypto activity reached an estimated $350 billion in annual blockchain transaction value across the region and North Africa in 2025–2026, more than three times the roughly $100 billion recorded in 2022, according to the Bitcoin Policy Institute.
The growth reflects more than enthusiasm for digital assets. Researchers say economic pressure, currency instability, government efforts to develop crypto markets and ongoing conflict are all reshaping where and how money moves.
In particular, the conflict involving Iran has created a new use case for digital assets: moving and preserving wealth when conventional financial systems become harder to access.
“Regional conflicts tend to accelerate capital outflows,” researchers for the institute wrote. “The Iran conflict displayed a different dynamic: instead of exiting the region, a growing share of capital shifted into digital assets, underscoring the increasing role of cryptocurrencies—and Bitcoin in particular—as a hedge against economic and geopolitical uncertainty.”
Middle East crypto activity finds a different kind of safe haven
Bitcoin did not immediately behave like a traditional refuge when fighting between Israel and Iran began in June 2025.
Instead, the cryptocurrency initially moved alongside global risk assets as investors reacted defensively to the shock. The report describes a classic risk-off response, with Bitcoin falling as equities and other risk-sensitive assets came under pressure.
The mood changed afterward. Investors began moving away from more speculative cryptocurrencies and toward Bitcoin, lifting its share of the overall crypto market to a one-month high of 64.8%, according to the institute.
Bitcoin’s price then stabilized even as the conflict continued, suggesting that some investors were starting to treat the asset less as a high-risk trade and more as a tool for navigating economic uncertainty.
The institute links that shift to concerns about the conflict’s broader economic effects, including rising oil prices, inflation and potentially higher interest rates. Crypto markets also have one practical advantage during a crisis: they operate around the clock, including when traditional financial markets are closed.
That does not make Bitcoin an instant safe haven. The early move in the conflict showed the opposite. But the later rotation into Bitcoin suggests that its role can change as investors assess the longer-term consequences of a geopolitical shock.
The pressure is even more visible in countries dealing with weaker currencies. Egypt, Turkey, Lebanon and Iran were highlighted in the report as markets where currency depreciation has encouraged greater use of Bitcoin and U.S. dollar-pegged stablecoins.
For people facing rapidly losing purchasing power, the appeal is less about speculation and more about having another way to hold and transfer value.
The report argues that the region is increasingly splitting into two distinct crypto stories. In countries affected by sanctions, conflict or currency instability, digital assets can provide an alternative route for transferring money beyond traditional financial channels.
Meanwhile, wealthier Gulf markets are positioning themselves as destinations for regulated crypto businesses and institutional capital.
The United Arab Emirates and Bahrain have both pursued regulatory frameworks designed to attract companies and investors operating in digital assets. In May, Kraken parent company Payward said it had received preliminary authorization from Dubai’s Virtual Assets Regulatory Authority to conduct broker-dealer and investment management activities.
That contrast is becoming an important part of the region’s crypto identity. In one market, digital assets can be a response to financial disruption. In another, they are increasingly treated as an institutional business opportunity.
More recent events in Iran offer a glimpse of how quickly funds can move after violence escalates. Chainalysis tracked about $10.3 million leaving Iranian crypto exchanges between February 28 and March 2 this year, following U.S.-Israeli airstrikes.
Chainalysis cautioned that those transfers could have represented several different activities, including individuals withdrawing funds, exchanges adjusting their liquidity or state-linked entities moving assets. The data therefore does not establish a single reason for the outflows.
Still, it illustrates the speed at which blockchain-based funds can move during moments when conventional financial infrastructure is under pressure.
For the broader crypto industry, that is perhaps the most significant takeaway. Middle East crypto activity is no longer just a story about trading volumes, startups or speculative demand. It increasingly intersects with questions about inflation, sanctions, capital mobility and the resilience of financial systems during periods of disruption.
The Bitcoin Policy Institute says the Iran conflict demonstrated a growing demand for financial alternatives while also showing how Gulf states have continued building more formal crypto markets despite regional instability.
The result is a region where the same technology can serve radically different purposes: a defensive tool for preserving purchasing power in one country and an institutional asset class being cultivated by regulators in another.
Middle East crypto activity has therefore become a window into something larger than crypto itself—how people and institutions adapt their relationship with money when the usual routes become less reliable.