Crypto asset management company Grayscale said the crypto market has stalled as geopolitical tensions in the Middle East have brought improvements to the macro backdrop.
“The Iran war overshadowed nearly all other market developments in March,” Grayscale Research said in a note on Wednesday.
Before the conflict escalated, global economic growth appeared to be strengthening and central banks were leaning towards cutting interest rates. A sharp rise in oil prices has disrupted that outlook, exacerbating inflation concerns, pushing up interest rate expectations, putting pressure on risk assets and keeping investors on the sidelines, the report said.
Cryptocurrency markets have been volatile since the conflict in the Middle East began, but generally range-bound, with sharp moves driven by headlines linked to changes in oil prices and risk sentiment. Bitcoin During the first upgrade, prices initially fell to around $60,000 before rebounding to the low $70,000s before falling back again as the conflict continued and the macro environment tightened.
The situation has recently escalated again as investors retreated from risk assets, sending Bitcoin down about 10% from its March high, with Ethereum (ETH) and other tokens also falling. Despite the turmoil, Bitcoin has performed better than some traditional markets, having largely flatlined and even outperformed stocks at times since the war began, underscoring its sensitivity to macro shocks and its relative resilience.
For now, Grayscale expects many market participants to wait for clearer news. If conflicts ease and energy prices retreat, markets may quickly reprice to adjust to a more supportive macro environment. Otherwise, persistently high oil prices could continue to weigh on economic growth and delay the broader recovery.
Even so, the cryptocurrency has shown remarkable resilience. Prices have remained relatively stable amid the volatility, suggesting a more durable bottom may be forming. The research team also noted that continued inflows into spot cryptocurrency investment products and a pickup in futures positions suggest risk appetite is stabilizing beneath the surface.
Looking ahead, the report believes that the key catalyst for a sustained rebound will be a reduction in macro uncertainty. But it maintains that the asset class’s long-term drivers, including the growing adoption of stablecoins and tokenized assets, remain intact.
Industry data shows that the stablecoin market has expanded rapidly in recent years, with total supply increasing from approximately US$20 billion in 2020 to more than US$300 billion in 2025, or approximately US$315 billion.
In 2025 alone, the industry will add approximately $100 billion, reflecting new growth after a brief contraction as demand for U.S. dollar-pegged digital assets surges in trading, payments, and on-chain finance.
Historically, periods of heightened uncertainty like the current one provide attractive opportunities for long-term investors to prepare for the next phase of growth, the report added.
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