In the recent coronavirus pandemic, several researchers have focused on the drivers of cryptocurrency behavior. In particular, this study provides insights into what can drive Islamic cryptocurrency markets and how do they react during the COVID‐19 pandemic. We explore the cryptocurrency volatility and the connectedness between the Islamic, conventional, and COVID‐19 confirmed cases and deaths using the wavelet approaches. The preliminary results show that faith‐based cryptocurrencies have reduced risk exposure than their conventional counterparts, in the long run, making them more appealing for investment, particularly for investors seeking low‐risk and Shariah‐compliant assets. Furthermore, the empirical results indicate that both Islamic and conventional cryptocurrencies are more sensitive to the death toll than the newly confirmed cases. We also observe significant positive co‐movements between Bitcoin and Islamic cryptocurrencies. Besides, Bitcoin exhibits a substantial response during various time scales while compared with Islamic cryptocurrencies. This study contributes to the literature by investigating the sensitivity and the vulnerability of a new category of cryptocurrencies backed by tangible assets to pandemic shocks. To the extent of the author's knowledge, this study is the first attempt that examines the co‐movement between Islamic and conventional cryptocurrencies using the wavelet approach. A viable, ethical, and alternative investment route for faith‐based investors can be provided by the Shariah‐Compliant cryptocurrencies as they are risk‐reduced and less sensitive to the pandemic than conventional benchmarks. Besides, this study creates opportunities in portfolio diversification for investors.