April 15, 2024: “John Abbott, a former Canadian prime minister, once remarked, ‘War is the art of devastation.'”
Amidst the mounting tension between Iran and Israel in the Middle East, with the possibility of a full-blown war looming large, the global crypto community remains vigilant, keeping a close watch on developments. This comes at a critical juncture, as we approach the scheduled Bitcoin halving event, due to take place soon. The early fallout from this Middle Eastern conflict has already caused Bitcoin’s value to plummet by 7.7%, reaching a low of $62,773 on Saturday – its weakest point since March.
On April 13, Iran retaliated against Israel with a large-scale attack using drones, cruise missiles, and ballistic missiles. This marked a rare instance of a direct assault by Iran against Israel. The provocation came following reports that Israel had bombed the Iranian embassy in Syria, resulting in the death of several high-ranking Iranian military officials. At the same time, Israel is embroiled in another conflict with Hamas in Palestine, which has tragically claimed over 33,000 lives in Gaza within the past year.
After Iran’s attack, conventional markets were protected from significant repercussions because they were closed over the weekend. In contrast, cryptocurrency markets, which operate continuously, experienced the full brunt of the geopolitical turmoil, causing Bitcoin’s value to decrease by 7.7% from its peak of $72,797 on April 8, 2024, to $62,773 by Saturday.
In the next few days, Bitcoin’s reward for miners will be cut in half during a process called halving. This event, which occurs approximately every four years, reduces the number of Bitcoins given to miners as a reward for adding new blocks to the blockchain. The current market sentiment is optimistic about this development.
Based on historical trends following previous Bitcoin halvings in 2012, 2016, and 2020, the value of Bitcoin has consistently risen significantly. Inspired by past occurrences, investors, market analysts, and cryptocurrency advocates expect Bitcoin to surpass the $150,000 milestone around the time of the next halving event, scheduled for April 19-20, 2024.
Despite the intricate and tense relations between Iran and Israel, which could lead to broader geopolitical turmoil, cryptocurrency supporters remain on edge, eagerly anticipating the upcoming halving event.
Ukraine-Russia War and Crypto
Since Russia’s invasion of Ukraine in February 2022, analysts have identified a notable increase in cryptocurrency donations. The ongoing Ukraine-Russia conflict serves as a significant modern-day battlefield characterized by advanced military technology, live reporting through action cameras, and the adoption of digital currencies to finance military and medical expenses.
According to a report from the World Economic Forum (WEF), approximately $212 million in cryptocurrencies have been donated towards pro-Ukrainian efforts since February 2022. Among this amount, around $80 million were directly given to the Ukrainian government. The funds were utilized for purchasing military supplies, drones, and medical equipment. Additionally, an NFT (Non-Fungible Token) of the Ukrainian flag was sold for $6.75 million to support the cause.
Similarly, $ 5.4 million worth of crypto was raised by pro-Russian groups to assist the Kremlin.
According to Chain Analysis’ research, Ukraine held the third position and Russia was in ninth place before the major invasion in February 2022, in terms of global crypto adoption. Following the onset of the war, there was a substantial increase in cryptocurrency transactions observed in both nations.
Is war good for the crypto ecosystem?
Asking this question is akin to asking if cancer is good for the body.
The obvious answer is no.
War profiteering is the unfortunate outcome of moral decline, representing the darkest side of human greed where compassion and principles fade away. As renowned writer George Orwell once remarked, “war against another nation occurs only when those in power believe they will financially benefit from it.”
In agreement with this perspective, it appears that the consequences of a global conflict would primarily bring unfavorable outcomes for the crypto industry. Investors may be dissuaded, and the technological progress essential for the crypto ecosystem could face significant setbacks. Instead of investing in technological infrastructure to foster crypto markets, nations might prioritize increasing their defense budgets.
The founders of Bitcoin and blockchain technology harbored a common ambition: building a decentralized financial network for peer-to-peer transactions, free from the influence of any government or regulatory body. However, in times of global unrest, governments may respond by imposing stricter tax regulations on the crypto market to finance their needs first and foremost, potentially even funding wars.
Hope Ahead
In contrast to the heightened tensions between Iran and Israel, financial markets started the week with optimistic trends. This improvement was driven in part by a call for calm from US President Joe Biden, urging both parties to prevent further conflict and avoid the risk of a larger war. As a result, Bitcoin rebounded, increasing by 3.4% to reach $66265 on Monday.
Over the next few days, the cryptocurrency world will experience a significant event called “halving,” which is generally seen as a positive sign for prices. However, any major global conflicts could significantly decrease the likelihood of crypto reaching $150,000.
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2024-04-15 15:49