Key Takeaways:
Geopolitical risk is failing to lift Bitcoin and gold, two assets historically viewed as hedges during times of conflict.
Bitcoin traded flat at $64,405.60 on July 20 as escalating US-Iran hostilities entered their fifth month, with the world's largest cryptocurrency down 27% year-to-date — making it the worst-performing major asset class of 2026 alongside gold.
"This is something we haven't seen before in any calendar year," Charlie Bilello, Chief Market Strategist at Creative Planning, said of the simultaneous decline in Bitcoin and gold during an active war.
Gold has fallen 7% this year to around $4,020 an ounce, while the S&P 500 has gained 9% and the Nasdaq has risen 10%, according to market data. Bank of America cut its 2026 average gold forecast by 14% to $4,360 an ounce, and JPMorgan lowered its third-quarter estimate to $4,300. Bitcoin's 24-hour trading volume remained subdued as traders weighed the risk of further escalation against a potential Federal Reserve rate decision later this month.
The breakdown of a fragile US-Iran ceasefire earlier this month has kept risk assets under pressure, with BlackRock estimating the conflict will shave about 0.4% off global GDP in 2026. Analysts warned that any short-term crypto gains could invite faster selloffs if geopolitical tensions continue to escalate.
Oil market tells a measured story
Brent crude prices have risen 13% since the latest flare-up, but futures curves suggest investors expect a temporary disruption rather than a prolonged supply shock, according to BlackRock Investment Institute. High starting oil inventories, demand adjustment and ongoing AI-led investment have helped contain the shock without materially changing the global macroeconomic outlook.
The relatively muted reaction in oil contrasts with the selloff in risk assets. Bitcoin options data from CoinDesk shows traders are nonetheless betting on a rebound to $72,000 by month-end, with large positions signaling an upward trend around the Fed's interest-rate decision.
Inflation divergence and the Fed path
The US-Iran conflict is expected to add about 0.8 percentage points to global headline inflation, BlackRock estimates, with Europe and parts of Asia more exposed given their reliance on energy imports. The US is relatively insulated, supported by greater energy independence and exposure to the AI investment cycle.
James Thorne, Chief Market Strategist at Wellington-Altus Private Wealth, said regulatory clarity from the Clarity Act gives institutions the legal framework to treat Bitcoin as a legitimate portfolio building block. He estimated that if Bitcoin reaches Nvidia's current market value, its fixed supply of 21 million coins could support prices around $240,000 to $250,000 per coin.
Kelvin Wong, Senior Market Analyst at OANDA, said gold's key support level sits at $3,886, with a break below that potentially unleashing further weakness toward $3,500. Bitcoin's next major support is at $60,000, a level that has held since early May despite the ongoing conflict.
This article is for informational purposes only and does not constitute investment advice.
