Crypto has had a shaky start to October, losing 3.29% of its overall market capitalization in the last 24 hours. The digital asset market is now valued at just $2.16 trillion.

The world’s largest cryptocurrency, bitcoin, is also languishing at around $61,500 at the time of writing, a slight decline from September's price activity, which frequently saw it surpassing $65,000.

Indeed, crypto traders are increasingly favoring gold, a perennial store of value, hedge against market uncertainty, and inflation hedge. Its inverse relationship with the dollar also means that it has emerged as an attractive asset class amid greater volatility in the bitcoin market.

"Global instability, particularly in the Middle East, is strengthening oil and the dollar, putting pressure on bitcoin and other risk-on assets," Chris Kline, co-founder of BitcoinIRA, told TheStreet Crypto. "After Bitcoin’s strongest September in over a decade, October is shaping up to be volatile, with the anticipated lagging effects of the April halving and a contentious U.S. election on the horizon."

With turmoil persisting in the Middle East, bitcoin is expecting greater market volatility. “The violence in the Middle East is not to the benefit of any risk assets,” said Two Prime CEO Alexander Blume. “Though bitcoin has characteristics that make it suitable as a safe haven asset, like unconfiscatability and finite supply, the market mainly treats it as a speculative asset. Further escalation of hostilities will likely not be good for the price of bitcoin in the short-term.”

Moreover, the U.S. Federal Reserve's recent interest rate cuts and increase in money supply has intensified currency wars, Kline added. "This backdrop of geopolitical tensions, monetary policy shifts, and political uncertainty creates a perfect storm for market volatility in the coming month," he said.