As the conflict between Israel and Hamas continues to escalate, it is difficult to ignore the repercussions it may have on different sectors, including the volatile cryptocurrency market. Several analysts and investors are speculating about the impacts of this conflict on virtual assets.
According to a Wall Street Journal According to the report, Hamas's attack on Israel last weekend was funded using cryptocurrencies. Digital currency wallets that Israeli authorities linked to the Palestinian Islamic Jihad (PIJ) received up to $93 million in cryptocurrency between August 2021 and June of this year. Hamas-connected wallets received around $41 million during a similar period, according to the report.
"Hamas terrorists launched social media campaigns to raise funds through cryptocurrencies, and Israel, known for its technological expertise, blocked cryptocurrency accounts used for Hamas financing," said Manhar Garegret, country director for India and Global Partnerships on Liminal, a wallet infrastructure. and custody solutions platform. "Crypto accounts used for illicit activities were easily identified with the help of popular exchanges like Binance, and law enforcement agencies took immediate action, resulting in one of the largest financial attacks against Hamas terrorists," he said. Garegret.
However, outside of cryptocurrency markets, it is important to note that the conflict demonstrated the ability of intelligence agencies to identify and restrict digital asset portfolios owned by terrorists. Garegret said: "Using Blockchain analysis, Israel's intelligence agencies showed a new way to paralyze the terrorist by cutting off his funding resources."
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Impact on digital currencies and what you should do: The cryptocurrency market is driven by multiple factors and the global geopolitical situation is one of them. โSince the start of the conflict between Israel and Hamas, we have not witnessed any significant fluctuations in digital asset prices, but things may look different in the short and medium term. Israel is an active player in cryptocurrency mining and any disruption in the mining process can result in a sharp increase in the Bitcoin hash rate. Any increase in BTC's hash rate could directly affect its price in the short term,โ Garegret said.
Analysts believe that if the conflict between Israel and Hamas contributes to a broader sense of global uncertainty, it could drive some investors toward assets like Bitcoin, often referred to as "digital gold" and seen by some as a reserve of value in times of uncertainty.
Kumar Gaurav, CEO of Cashaa, a blockchain-based financial products platform, says: โIt is important to note that cryptocurrencies have shown resilience amid geopolitical turmoil in the past. โTheir decentralized nature and appeal as a hedge against traditional financial systems make them an attractive asset class in times of uncertainty.โ
For example, the price of Bitcoin skyrocketed during tensions between the United States and Iran in early 2020.
Gaurav adds: โThe conflict between Israel and Hamas, a recurring and deeply rooted crisis in the Middle East, has the potential to cast a temporary shadow over the cryptocurrency market, much like what we saw during the war between Russia and Hamas. Ukraine. Therefore, the short-term outlook suggests that while short-term fluctuations may occur, the overall trajectory of cryptocurrencies remains positive as they continue to evolve and mature. Investors should exercise caution and remain confident in the long-term potential of digital assets. In such uncertain times, the best thing you can do is accumulate and hold your cryptocurrency investments for the long term.โ
What you need to understand: While the conflict between Israel and Hamas certainly has global economic impacts, its effect on cryptocurrencies is not immediately visible. Instead, market volatility appears more influenced by factors such as comments from key influencers, policy changes, and overall market sentiment. However, as the situation evolves, there could be subtle and indirect impacts on the broader crypto market. More observations and analysis would be essential for an accurate understanding. Therefore, the potential for cryptocurrencies to act as a safe haven in times of geopolitical uncertainty remains an intriguing area for future research.
