In today’s world, amid growing geopolitical conflicts and increasing uncertainty, cryptocurrency investors, like everyone else, are experiencing heightened tension. The ongoing conflict in Israel serves as a prime example, where global instability and chaos have far-reaching consequences. To fully grasp this situation, it’s essential to explore the connections between the Israeli conflict and other global events.
The Israel conflict, rooted in territorial and religious disputes, has a long history, and it continues to this day. This prolonged conflict not only impacts regional stability but also reverberates on the global stage, including the realm of cryptocurrencies.
War Increases Risks:
Interestingly, the conflict in Israel shares many parallels with the ongoing war in Ukraine and Russia. Both conflicts have been marked by a growing sense of hatred and cruelty between nations, escalating over time.
Ukrainian President Volodymyr Zelenskyy has received substantial support from various countries, including donations in cryptocurrency, equipment, and resources. However, the ongoing military conflict between Israel and HAMAS, which has persisted for over a week, has recently taken center stage in global attention. Zelenskyy expressed concerns that this Middle Eastern war could divert resources from Western allies. However, following a meeting with the U.S. Secretary of Defense, who assured continued support for Ukraine despite the Israel conflict, stability was restored.
Geopolitical Influences on the Cryptocurrency Market:
Numerous factors influence the cryptocurrency market, including the global geopolitical landscape. Although the Israel-Hamas conflict hasn’t triggered significant price fluctuations in digital assets, it’s important to note that Israel plays a significant role in cryptocurrency mining. Any disruption in this process could impact Bitcoin’s hashing rate, potentially affecting its short-term price.
Some analysts suggest that the heightened global uncertainty resulting from the Israel-Hamas conflict could draw investor attention to assets like Bitcoin, often referred to as “digital gold” and considered a means of wealth preservation during uncertain times.
Kumar Gaurav, the CEO of Cashaa, a blockchain-based financial product platform, emphasizes that cryptocurrencies have displayed stability during past geopolitical crises, owing to their decentralization and their appeal as a hedge against traditional financial systems. For example, Bitcoin’s price saw significant increases during the U.S.-Iran tensions in early 2020.
Gaurav also highlights that the conflict between Israel and Hamas, a long-standing Middle East crisis, may temporarily impact the cryptocurrency market, akin to the Russia-Ukraine conflict.
Despite potential short-term fluctuations, the outlook for cryptocurrencies suggests continued growth and strengthening. Investors are advised to exercise caution and maintain confidence in the long-term potential of digital assets. During unstable periods, it’s advisable to retain cryptocurrency investments for the long term.
Cryptocurrency’s Role in Conflict and Humanitarian Initiatives:
One intriguing aspect of the relationship between conflicts and global financial volatility is the role of cryptocurrency. Cryptocurrencies have become attractive assets for investors during times of instability and financial uncertainty. How do conflicts affect cryptocurrency markets, and how are cryptocurrencies employed during periods of volatility?
Cryptocurrencies play a significant role in financing the military wing of HAMAS, known as the Izz ad-Din al-Qassam Brigades. This revelation came to light in 2021 when Coindesk conducted an investigation, revealing that HAMAS receives cryptocurrency donations, which are subsequently funneled into Binance wallets. U.S. authorities have also reported tracking and apprehending numerous cryptocurrency accounts used to fund organizations like “Al-Qaeda” and “Al-Qassam.” By 2023, the cumulative amount of such “cryptocurrency donations” had reached $41 million.
Clearly, cryptocurrency has become the primary source of funding for HAMAS, particularly after its designation as a terrorist organization in many countries. Notably, Russia implemented a similar scheme to mitigate the impact of global sanctions. It’s essential to note that both countries use Bitcoin to support their military-industrial complexes (MIC). The key difference lies in HAMAS’s transparency, claiming that the cryptocurrency in their accounts originates exclusively from “donations from ordinary citizens,” rather than powerful entities.
These facts underscore how U.S. sanctions effectively restrict traditional funding methods. For entities subjected to sanctions, cryptocurrency emerges as the sole means to evade monitoring by banking systems, ensuring anonymity and reducing the risk of tracking.
A more profound conclusion is that cryptocurrency can serve both as a perilous and a lifesaving tool during times of conflict and volatility. Israel and the U.S. have recognized this and joined forces with Ukraine. In Israel, numerous banks, regulators, and cryptocurrency companies have united to facilitate cryptocurrency donations through “Crypto Aid Israel.” This multi-signature wallet accepts donations in various currencies, including Bitcoin, Ethereum, and stablecoins pegged to the dollar.
Private cryptocurrency firms, such as Fireblocks, MarketAcross, CryptoJungle, Collider Ventures, and the Israeli Blockchain Association, play a pivotal role in this alliance. The project’s objective is to raise the necessary funds to provide food and shelter to families who have lost their homes and allocate resources for hygiene and medical supplies for Israeli civilians affected by bombings. Additionally, the initiative aims to raise awareness of the challenges faced by Israeli citizens.
Israel’s proactive approach serves as a noteworthy example. In 2022, with Russia’s full-scale invasion of Ukraine, the Ministry of Digital Transformation and Ukrainian crypto companies collaborated to organize a robust flow of international community donations. Everstake, KUNA, and MintCyber created the “Crypto Aid for Ukraine” platform, supporting not only bitcoins and stablecoins but also altcoins. In its inaugural year, the platform raised over $60 million for military and humanitarian financial aid. Furthermore, a special DAO was established in partnership with Solana for this purpose.
Crypto Contributions and Charitable Initiatives for Ukraine:
Donations in cryptocurrency allowed raising funds for Ukraine’s needs from all over the world in a matter of days. Many organizations and funds joined in to donate to support the Armed Forces of Ukraine because they started accepting donations almost from the first day of the war.
On the first day of military aggression alone, the Ministry of Digital Transformation collected over $7 million in cryptocurrency. They gathered 59.2 Bitcoins (approximately $2.33 million at the exchange rate on February 24, 2022), 1,725 Ethereum (around $4.83 million), and 675,000 USDT.
UACatsDivision is an NFT collection created with the support of Incrypted and one of the biggest European cryptocurrency exchanges WhiteBIT. The NFT collection features 10,000 cats with the ambitious goal of raising funds for 4 underwater drones.
Within the first three hours of the collection’s launch, they managed to raise a little over 3.5 million Ukrainian hryvnias (UAH). In the first ten hours of fundraising, they collected more than 5 million UAH.
RELI3F.xyz raised around $2 million in crypto, according to OpenSea data. Their first collection in support of Ukraine sold out in 30 seconds and provided assistance to Ukrainians in the amount of $1 million.
Funds: Uniting Crypto Enthusiasts Without Slowing Down:
On February 25, 2022, the Unchain Fund was established. The Unchain Fund assists civilians, not the military. Among the notable donors to the Unchain Fund is Vitalik Buterin, the developer of Ethereum, who contributed 750 ETH (a little over 46 million UAH at the exchange rate at the time of writing this article).
On February 25, the Come Back Alive fund received one of the largest one-time donations from an anonymous source. The donation amounted to 80 Bitcoins or the equivalent of $3 million. The donor chose to remain anonymous.
Roman Synitsyn, one of the leaders of the Sergiy Prytula Charitable Foundation, reported that in the early days of the war, the foundation received $1 million in a single cryptocurrency payment.
Prytula and Kalush Orchestra auctioned off an award received at the Eurovision Song Contest. During a live broadcast on May 29, the bid increased from 45,000 to 900,000 dollars within an hour. WhiteBIT became the owner of the cup, and the funds went towards the purchase of the PD-2 drone system for the Ukrainian army.
Conclusion:
In a world filled with conflicts and economic uncertainty, society and investors alike are constantly under tension. Military conflicts serve as vivid examples, demonstrating their influence across all sectors.
The ongoing conflict in Israel, which has been enduring for a long time, has a global impact, resonating worldwide and affecting various spheres, including the cryptocurrency market.
Cryptocurrency companies and nations are joining forces to provide humanitarian aid, as well as to showcase their support and solidarity in challenging times. The expanding use of cryptocurrencies in humanitarian and charitable efforts opens up new horizons and opportunities, emphasizing their importance not only in the realm of economics but also in the field of global assistance and support.