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Escalating geopolitical conflicts are influencing global financial movements, with gold still being the top choice for secure investments, while cryptocurrencies keep performing similar to high-risk tech stocks instead of stable assets, according to Merkle Capital, a digital asset fund manager.

Escalating conflicts in the Middle East, especially disputes between the US and Iran, have caused a significant rise in gold prices, whereas digital currencies are facing increased selling pressure.

Although there have been persistent stories portraying Bitcoin as “digital gold,” its price movements indicate something different in today’s market, according to Thanalop Preedamanoch, a fund manager at Merkle Capital.

He stated, ‘When geopolitical tensions increase, capital leaves crypto markets along with other risk-related assets, undermining the belief that crypto serves as a safeguard during times of instability.’

As per Merkle, the future of cryptocurrency in the first half of 2026 is influenced more by regulatory developments than by technological advancements. Two U.S. legislative proposals, the Clarity Act and the Genius Act, may influence the market’s trajectory in the near future, according to Mr. Thanalop.

The Clearing Act, designed to create explicit legal distinctions between securities and commodities within digital assets, has been approved by the House of Representatives and is now under consideration by the Senate. The bill’s future remains unclear.

Coinbase, a leading private sector advocate for the bill, has ended its support, expressing worries that the most recent version still places too many restrictions on the industry.

The discussion focuses on whether cryptocurrency tokens can legally distribute earnings or offer dividends to owners without being categorized as financial instruments. A well-defined structure would enable initiatives to create lasting economic systems while ensuring that institutional investors are assured they are functioning within completely lawful limits.

Without this clarity, significant amounts of institutional capital may continue to stay away, stated Mr. Thanalop.

Persistent challenges continue to be unaddressed, such as the regulation of decentralized finance systems and limitations that stop stablecoins from providing returns similar to those offered by conventional bank accounts.

“If legislators and business representatives do not achieve agreement, the Clarity Act might be postponed, altered substantially, or not pass as it is, which would eliminate a major possible driver for the cryptocurrency market in the second quarter,” he stated.

The Act on Genius, which regulates the issuance of stablecoins, has been approved in principle and is currently being developed into secondary regulations. These regulations are anticipated to be completed by July 18.

The law enables banks and financial organizations to create their own stablecoins within blockchain systems, possibly speeding up the widespread use of finance on the blockchain. Following the July deadline, markets could start witnessing real bank-issued digital dollars, instead of depending only on private providers like Tether or Circle, as Merkle pointed out.

The market still classifies cryptocurrency as a high-risk asset, according to Mr. Thanalop.

“Until regulatory ambiguity remains and geopolitical conflicts keep pushing investors toward conventional safe assets, gold is expected to draw an increasing portion of worldwide capital movements,” he stated.

A surge in the middle of the year is probable, contingent on the results of the US regulatory discussion instead of technological advancements, stated Mr. Thanalop.

“If the Clarity Act is delayed or takes a form that the private sector finds unacceptable, hopes for a strong cryptocurrency recovery could diminish, strengthening gold’s position as the preferred asset in an ever more uncertain global landscape,” he stated.

As of January 29, gold performed much better than Bitcoin, with prices rising by 15.1% to approximately $5,600 per ounce. Bitcoin increased by just 2.3% to reach around $89,500.

Provided by SyndiGate Media Inc.Syndigate.info).