Cryptocurrencies have been volatile over the past few years due to geopolitical and economic events. With talk of a potential war between Iran and Israel starting in October, and political and economic crises escalating in the United States, the question becomes: How will this affect the crypto world? And what are the future prospects for this emerging market?
#### 1. The impact of a potential war between Iran and Israel on crypto
The Middle East is one of the most geopolitically sensitive regions in the world, with any conflict there having a wide impact on global markets. In the event of a war between Iran and Israel, there could be several impacts on the cryptocurrency market:
- Increased demand for digital currencies: In times of crisis, individuals turn to alternative assets as a safe haven. Digital currencies may be a major destination for investors in the event of an escalation of the war, especially with the increasing use of these currencies in non-traditional transactions, away from banks and traditional financial institutions.
- Imposing economic sanctions: If the war escalates, new international sanctions will likely be imposed on Iran, which will increase reliance on digital currencies to avoid restrictions imposed on traditional financial systems.
- Increased volatility: As the crisis escalates, cryptocurrencies may experience high volatility. While some investors seek a safe haven, others may prefer to stay away from high-risk assets such as cryptocurrencies, leading to significant market volatility.
#### 2. The role of the United States in the digital economy
The United States is one of the leading countries in adopting and regulating cryptocurrencies. However, in 2024, things are starting to take a different turn:
- Increased regulations: US authorities have begun to increase their regulations on the digital market, in an attempt to protect investors and reduce the risks associated with illegal trading. With the escalation of political tensions within the United States, the digital market may witness further regulatory tightening, which may lead to disruption in transactions within the United States, but may open the door for other countries to benefit from this gap.
- Traditional banks and cryptocurrencies: As institutional adoption of cryptocurrencies increases, major US banks have begun offering services related to Bitcoin and other cryptocurrencies. This move signals a growing acceptance of these assets, strengthening their position as a major player in the global financial system.
#### 3. Countries’ attraction to digital currency trading
In light of volatile geopolitical and economic events, many countries have begun to gravitate towards adopting digital currencies as a means of reducing their dependence on traditional financial systems, which may be affected by sanctions or economic crises:
- Middle Eastern countries: As tensions rise, some Middle Eastern countries may turn to cryptocurrencies as a way to avoid sanctions or financial restrictions. Iran, for example, may seek to use crypto to offset economic losses resulting from sanctions imposed on it.
- Emerging Markets: Many developing countries are beginning to see cryptocurrencies as an opportunity to bypass traditional financial systems, avoid inflation and the loss of value of their national currencies. Blockchain-based technologies also help provide alternative and transparent financial solutions.
- Russia and China: These two countries may increasingly rely on digital currencies to counter US control of the global financial system. Indeed, Russia has begun experimenting with a digital ruble, while China is promoting a digital yuan as a means of stimulating global e-commerce.
#### 4. Future Prospects: Crypto Facing Crises
As the reliance on cryptocurrencies increases in the face of global crises, these assets are expected to see increased growth. Cryptocurrencies may become a means of avoiding sanctions and financial restrictions, and may even become a means of formal financial exchange in some countries. However, at the same time, volatility and risks will remain high, especially in light of ongoing geopolitical crises.
Ultimately, the future of crypto in October 2024 and beyond will largely depend on major geopolitical events, particularly a potential war between Iran and Israel, and the role of the United States in the digital economy. Markets could see big jumps or sharp declines depending on how these crises develop, but there is no doubt that cryptocurrencies will remain at the heart of global attention as a new financial engine.
