Let's think about it...
The cryptocurrency market is constantly influenced by global political and economic events, and ongoing military conflicts have a significant impact on it. In 2024, events such as the ongoing war between Russia and Ukraine, as well as the escalation of the conflict in Israel and the Gaza Strip, have had an impact not only on international markets but also on the crypto industry.
Wars often create global uncertainty, which in turn increases demand for alternative assets such as Bitcoin and other cryptocurrencies. For example, since the start of the Russian invasion of Ukraine, both sides have actively used cryptocurrencies to raise funds: Ukraine has raised millions of dollars in donations in Bitcoin, Ethereum, and other crypto assets, while pro-Russian groups have also used crypto to circumvent international sanctions and support their activities [oai_citation:4,Russia-Ukraine war: How both sides of the conflict have used crypto to win](https://cointelegraph.com/news/russia-ukraine-war-how-both-sides-of-the-conflict-have-used-crypto-to-win).
Equally important has been the impact of the Israel-Hamas conflict. Hamas uses cryptocurrencies to finance its operations, which has attracted the attention of international regulators. This conflict has intensified the debate on the regulation of cryptocurrencies in the context of preventing their use for terrorist financing. As a result, many governments have begun to demand stricter controls over crypto assets and tougher measures against the illegal use of blockchain [oai_citation:3,Terrorism and Israel-Gaza war weaponized to destroy crypto – Cointelegraph Magazine](https://cointelegraph.com/magazine/how-terror-israel-gaza-war-being-weaponized-destroy-crypto/).
In addition, military conflicts increase the volatility of the cryptocurrency market. Investors, seeking to protect their assets, move funds from traditional markets to cryptocurrencies, especially during times of crisis. Bitcoin, being decentralized and independent of state financial systems, is often perceived as a "safe haven" during times of instability. For example, in October 2023, amid the escalation of the conflict in Israel, there was an increase in the price of bitcoin [oai_citation:2,Russia-Ukraine war: How both sides of the conflict have used crypto to win](https://cointelegraph.com/news/russia-ukraine-war-how-both-sides-of-the-conflict-have-used-crypto-to-win) [oai_citation:1,Terrorism and Israel-Gaza war weapon ized to destroy crypto – Cointelegraph Magazine](https://cointelegraph.com/magazine/how-terror-israel-gaza-war-being-weaponized-destroy-crypto/).
However, with increasing regulation of the cryptocurrency market, especially in the US and Europe, many analysts believe that in the long term, military conflicts could lead to tighter regulations and even greater scrutiny of transactions, limiting the ability of cryptocurrencies to be used to circumvent sanctions and finance illegal activities.
How does this affect the future of the crypto industry?
Military conflicts are already shaping a new reality for cryptocurrencies. On the one hand, the growing interest in digital assets in times of political and economic uncertainty is increasing attention to cryptocurrencies as a means of preserving capital. For example, Bitcoin is often seen as a safe haven asset in times of crisis, similar to gold.
On the other hand, conflicts increase pressure on governments and regulators to more strictly control the use of cryptocurrencies. The involvement of cryptocurrencies in the financing of terrorist organizations, as demonstrated by the conflict in the Gaza Strip, has raised concerns among global regulators such as the US and EU authorities. As a result, calls for stricter laws are growing, which could limit the freedom to use cryptocurrencies and attack their decentralized nature [oai_citation:2,Terrorism and Israel-Gaza war weaponized to destroy crypto – Cointelegraph Magazine](https://cointelegraph.com/magazine/how-terror-israel-gaza-war-being-weaponized-destroy-crypto/).
Increased regulation: positive or negative?
For the crypto community, tighter regulation could be a two-way street. On the one hand, stricter laws could discourage investors who value the anonymity and decentralization of blockchain. On the other hand, more transparency and regulation could increase trust in cryptocurrencies among large institutional investors and lead to the legalization of cryptocurrencies in countries with strict financial policies.
On the other hand, conflicts such as the one in Israel, as well as the ongoing crisis in Ukraine, serve as an indicator of how cryptocurrencies can be used to circumvent sanctions and support financial flows in difficult conditions. These examples are pushing the global community to thoroughly review how digital assets are regulated and introduce new measures to prevent their use for illicit purposes [oai_citation:1,Terrorism and Israel-Gaza war weaponized to destroy crypto – Cointelegraph Magazine](https://cointelegraph.com/magazine/how-terror-israel-gaza-war-being-weaponized-destroy-crypto/).
Bottom line: what does the near future hold for cryptocurrencies?
Military conflicts are pushing for stronger regulatory measures, which could both improve the reputation of cryptocurrencies and lead to a new round of struggle to preserve decentralization. In 2024, the crypto market may face new challenges related to the introduction of tough measures against the use of cryptocurrencies for financing terrorism and circumventing sanctions. However, this also creates new opportunities for a more mature approach to the implementation of blockchain at the global level.
