Ongoing military conflicts and the instability of national currencies have significantly heightened interest in cryptocurrencies as a means for capital preservation and transfer in the Middle East. This conclusion was drawn by Zaid Belbaghi, managing partner at Hardcastle Advisory in London, in a piece for the Bitcoin Policy Institute (BPI).
According to estimates from the organization, the annual volume of on-chain transactions in the region is projected to rise from approximately $100 billion in 2022 to around $350 billion by 2025-2026.
Unlike the global market, where growth has been largely driven by institutional investments and regulatory changes, the MENA region's expansion is attributed to macroeconomic pressures and government-led digitalization initiatives.
Initial Market Response
Belbaghi analyzed the market's reaction to the escalation of tensions between Israel and Iran in June 2025. Following the initial strikes, Bitcoin's price dropped by about 2.3% to $105,200, while Ethereum fell by 7.5%. The overall market capitalization of cryptocurrencies declined by 3.7%.
Subsequently, Bitcoin's price stabilized within the range of $104,000 to $106,000, and its market share reached 64.8%. Belbaghi interpreted this trend as a shift of investors from altcoins to Bitcoin to mitigate risk.
He also highlighted the uninterrupted operations of cryptocurrency exchanges during this period. Stephen Coltman from 21Shares, whose views were cited by BPI, noted that during the strikes in the UAE in 2026, local stock exchanges halted trading while digital asset platforms continued their activities.
Diverse Factors Influencing Adoption
Belbaghi identified two distinct scenarios for the region's development. In Egypt, Turkey, Lebanon, and Iran, the demand for Bitcoin and dollar-pegged stablecoins is linked to currency devaluation and restrictions within the traditional financial system.
Conversely, in the UAE and Bahrain, growth is supported by favorable regulations, institutional participation, and government diversification programs.
Analysts from Chainalysis also noted the differences in market dynamics in their 2025 report. In the UAE, the volume of small cryptocurrency payments through trading services—less than $1,000—grew by 88.1% during the reporting period, which they attributed to increased everyday use of digital assets.
In Turkey, the situation was different. The country led the region with an annual cryptocurrency transaction volume of about $200 billion, but researchers observed a rise in speculative trading.
By mid-2025, the average daily trading volume of altcoins, smoothed over a 31-day period, exceeded $240 million, up from approximately $50 million at the end of 2024.
Chainalysis estimated that as purchasing power declined, some participants began taking on greater risks for potential returns. However, transaction volumes in retail categories of less than $1,000 and between $1,000 and $10,000 fell by 2.3% and 1.6%, respectively.
In Iran, analysts discovered an increasing isolation of the local cryptocurrency market: the average number of intermediary transfers between Iranian services and international exchanges rose from 1.6 in 2021 to 4.1 in 2025.
It is worth noting that in April, Matt Hougan, the investment director at Bitwise, and Ryan Rasmussen, the company's head of research, stated that the conflict in Iran has brought Bitcoin closer to functioning as a legitimate medium of exchange.