Experts from the crypto world analyze the possible reactions of the Bitcoin price to the new outbreak of violence in the Middle East.
During wars and other types of unexpected geopolitical events and conflicts, financial assets tend to react in different ways. The military conflict that is now in the spotlight is between Israel and Palestine and experts evaluate possible reactions of the price of Bitcoin.
The conflict between Arabs and Israelis is not new at all. It dates back 75 years when Israel’s illegal occupation of Palestinian territories began after the Second World War.
Such dynamics continued until a few days ago, when the Hamas group decided to counterattack. Although the conflict is old, it now seems to move to a new stage that could have an impact on the financial markets.
Possible Reactions of Bitcoin and Other Assets
Leaving the battlefield (armed and political), the truth is that conflicts have an impact on financial assets. In that sense, depending on what happens in the coming days, the price of Bitcoin would have some possible reactions.
Israel and Palestine do not have as much weight in the world of raw materials as Russia and Ukraine. Thus, no major changes are expected in the price of oil, gas and other assets. However, at least in Israel, there is an active digital currency market and it is a field for innovations in the sector.
Considering this, one might think that digital currencies could have a notable reaction to the conflict. On the other hand, the fact that the Israeli market is small and its active population in terms of crypto trading is small is highlighted.
Experts from the financial sector affirm that the crypto market will have a reaction. However, Bitcoin’s possible reactions to the conflict would not last longer, but would be limited to volatility that would quickly fade. The latter is the position of the cryptanalyst, Miles Deutscher, expressed in his X account.
“Data suggests that markets typically recover quickly from wars and other geopolitical shocks, despite experiencing initial volatility.,” he wrote.
Therefore, it is to be expected that the development of the conflict in the coming hours will lead to certain sudden movements. However, it would not take long for the crypto market to return to its current state.
The Possibility of Other Countries Involved
The ramifications of the Palestine-Israel conflict are notable and several players with great geopolitical weight in the Middle East area participate in it. Some of these, such as Iran, have considerable participation and influence in various markets, including cryptocurrency mining. In that sense, the digital mining industry is one of the main pillars of the Persian country when it comes to supporting US sanctions.
If the conflict spills over the borders of Israel and Palestine, all financial markets would panic. Iran is the key to this whole matter. Aside from being one of the global epicenters of Bitcoin hash power, the country is one of the world’s largest oil and gas holders. At the same time, the country has sovereignty over the Strait of Hormuz, where the vast majority of maritime trade between East and West takes place.
In geopolitical terms, Iran’s alleged involvement in the war in Ukraine has been key to causing NATO’s slowdown against Russia. That said, it can be understood that Bitcoin’s possible long-term reactions would have a lot to do with an overflow of the conflict in the Middle East.
By Leonardo Pérez
