As the Israel-Hamas conflict continues to escalate, it’s hard 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 report, Hamas’s strike on Israel last weekend was financed through cryptocurrency. The digital currency wallets that Israeli authorities linked to the Palestine Islamic Jihad (PIJ) received as much as $93 million in crypto between August 2021 and this June. Wallets connected to Hamas received about $41 million over a similar time period, per the report.
“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,” said Manhar Garegrat, Country Head of India and Global Partnerships at Liminal, a wallet infrastructure and custody solutions platform. “The crypto 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,” said Garegrat.
However, outside of crypto markets, it is important to note that the conflict showcased the ability of intelligence agencies to identify and restrict terrorist-owned digital asset wallets. Garegrat said, “Using Blockchain analysis, Israel’s intelligence agencies showcased a new way of crippling the terrorist by cutting off their funding resources.”
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While the Israel-Hamas conflict undoubtedly has global economic impacts, its effect on cryptocurrencies is not immediately visible. Instead, market volatility seems more influenced by factors such as key influencers’ comments, policy modifications, and overall market sentiment. However, as the situation evolves, there might be subtle and indirect impacts on the broader crypto market. Further observation and analysis would be essential for a precise understanding. Thus, the potential of cryptocurrencies to act as safe havens in times of geopolitical uncertainties remains an intriguing realm for future investigation.