The crypto market is driven by multiple factors and the global geo-political situation is one of them. The Israel-Hamas conflict is having a ripple effect on the financial markets around the globe.
Last month, the Wall Street Journal reported on how Hamas has used cryptocurrency to finance its surprise attack on Israel. Two days later, the Israeli government said it had frozen crypto accounts associated with groups like Hamas, the Palestinian Islamic Jihad (PIJ) and others. The Coin Desk also said that Bitcoin prices were likely to fall as the market braces for spread of the conflict.
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Manhar Garegret, Country Head- India and Global Partnerships at Liminal, a wallet infrastructure and custody solutions platform, says that since the start of the Israel-Hamas conflict, we have not witnessed any significant fluctuation in the prices of digital assets but things may look different in the short to mid-term.
Israel is an active player in crypto mining and any disruption in the mining process may result in a sharp rise in Bitcoin hash rate. Any increase in BTC hash rate could have a direct impact on its price in the short term
Manhar Garegret, Country Head- India and Global Partnerships at Liminal
“Israel is an active player in crypto mining and any disruption in the mining process may result in a sharp rise in Bitcoin hash rate. Any increase in BTC hash rate could have a direct impact on its price in the short term.
“Furthermore, in the case of the Israel-Hamas conflict, if it contributes to a broader sense of global uncertainty, it could potentially drive some investors towards assets like Bitcoin, which is often referred to as “digital gold” and is considered by some as a store of value in times of economic uncertainty.
Outside of crypto markets, what was more notable though, was that the Israel-Hamas conflict showcased the ability of intelligence agencies to identify and restrict terrorist owned digital asset wallets.
“By using Blockchain analysis Israel intelligence agencies showcased a new way of crippling the terrorist by cutting off their funding resources. Hamas terrorists launched campaigns on social media to raise funds through crypto and Israel, known for its tech expertise, blocked the crypto accounts used for Hamas funding. The accounts used for illicit activities were easily identified with the help of support from popular exchanges like Binance and immediate action was taken by law enforcement agencies resulting in one of the biggest financial assaults on Hamas terrorists,” says Garegret.
Shivam Thakral, CEO of BuyUcoin, India’s second longest running digital asset exchange, observes that unless the situation deescalates, the geo-political uncertainty may have a ripple effect on global financial markets.
The crypto market slipped by 0.5% and currently stands at $1.05 trillion while BTC lost its key support and slipped below the $27,000 mark for the first time this month. The geo-political uncertainty may have a ripple effect on global financial markets and this may continue till Israel-Hamas decide to deescalate the situation
Shivam Thakral, CEO of BuyUcoin
“The overall crypto market is witnessing a downward trend as Israel-Hamas conflict intensified on Tuesday. The crypto market slipped by 0.5% and currently stands at $1.05 trillion while BTC lost its key support and slipped below the $27,000 mark for the first time this month. The geo-political uncertainty may have a ripple effect on global financial markets and this may continue till Israel-Hamas decide to deescalate the situation,” he says.
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Cryptocurrency stalwarts like Bitcoin, Ethereum, and Dogecoin already experienced a decline amid the ongoing Israel-Hamas conflict. This event has brought in geopolitical risk into an already fragile financial market that’s struggling with inflation and surging interest rates.
