How the War in Iran is Affecting Crypto
Cryptocurrency is far more than just an economic dilemma, and it has come to be a political one as well. Unfortunately, cryptocurrency has become notoriously tied with recent large political turmoils, most notably, the war in Iran.
Whether it’s being used to circumvent sanctions, fund a war, or even send aid, cryptocurrency is actively being used by both Iran and the United States during the current tensions. Read on to learn more about the war in Iran and how it is affecting crypto.
Wars Affecting Cryptocurrency
No matter what war we are discussing, whether it’s Israel, Ukraine, or Iran, cryptocurrency has become a large player in these spaces. Mostly, it’s thanks to the fact that cryptocurrency is borderless and can be sent outside of the regular banking system.
While this might sound shady, with most assuming that it’s used to fund these wars (and they aren’t wrong) it’s also important to recognize the good cryptocurrency can do for a country. During a banking collapse (typical during a war) and sanctions, not only does the government suffer, but so too do innocent humans. Actually, we believe that the innocents actually suffer more than those on top, as they are the ones living hand to mouth or paycheck to paycheck and left holding an empty bag when international companies are unable to operate in certain countries or pay their employees there. Therefore, even aid organizations must turn to cryptocurrency for help.
A good example of this is the conflict between Israel and the Gaza Strip. While people like to believe that the sanctions are currently driving Hamas to come out of hiding, the opposite is actually true—it’s the innocents who are starving and dying while the terrorist organization continues to have access to everything on the black market just as they did before.
We aren’t saying that cryptocurrency isn’t used for nefarious purposes during war, just that it is also used for good, by average citizens and relief organizations alike. Therefore, whenever there is a war, cryptocurrency tends to increase in value due to increased use.
How is Iran Using Crypto?
Well, as you might imagine, Iran is using crypto to continue to fund their war outside of the current sanctions. But what might surprise you even more is there is some proof that Iran is taking bribes from certain countries via a stablecoin, allowing them to still purchase cryptocurrency even though the Straight of Hormuz is closed.
Why Isn’t Bitcoin Price Rising?
Reading the above section, you probably found yourself sneering as the price of Bitcoin is actually quite low right now—and you aren’t wrong. But you need to keep in mind that war is only one of the influences on cryptocurrency prices, and there are many more out there. Below is a list of the common causes of price fluctuations in cryptocurrency:
· Economic boom
· Wars
· Political conflicts
· Consumer sentiment
· Media announcements
· Business adaptations
Did you notice any reasons on the list that are happening in the world right now? Exactly. Not only is the economy down in almost every country in the world, but all of the political promises made by Donald Trump have stalled—and US citizens are beginning to lose faith that anything he promised will ever come to fruition.
Personally, we believe the overall economic downturn is the main culprit of the falling prices, as businesses and people alike have been forced to close their cryptocurrency positions in order to pay their bills. Plus, it’s a bad time to start a business—and most cryptocurrency businesses are start-ups, which boost the market—so without those, it’s easy to see why Bitcoin continues to struggle.
What Happens When the Conflict in Iran Ends?
Although we believe that the president is currently making empty threats, all conflicts do eventually have to come to an end. When that happens, we suspect cryptocurrency may rise in price.
Why? Well, sanctions don’t just end overnight, and an economic system that was already struggling may continue to struggle. Not to mention that the conflict has caused a poor economic situation to become even worse—with many airlines wondering how they will navigate the coming fuel shortages.
Therefore, when the conflict comes to an end, we assume that the economic pressure will ease a bit, enough that individuals may be able to stop the withdrawal of their cryptocurrency stashes and businesses may be able to look back into their plans to adapt cryptocurrency or blockchain as part of their business.
We should also mention that this conflict is taking a lot of political time and energy from American politicians. As such, we hope that once the conflict ends, they can get back to business, which includes passing the pro-cryptocurrency regulations that Trump promised. Though, don’t get too excited, as these may have just been campaign promises after all.
But don’t get too excited. Remember, some of the uses of Bitcoin and other cryptocurrencies will also disappear as countries return to their normal state, meaning there’s a chance that any price rises are nullified. So, we don’t recommend running out to buy anything just yet.
When is the Time to Buy Crypto?
As we write this, we have to acknowledge that things haven’t been “normal” globally for years. Not only was there a massive market crash in the early 00s, but then there was COVID, and of course, there are always wars. As such, we recommend not even attempting to time the market. If you truly want to buy crypto, now is as good a time as any.
Overall, it can be hard to dissect crypto and its ties to world politics, and though we’ve tried our best, we admit that we aren’t perfect. Therefore, don’t let wars and how they affect crypto prices trouble you too much. If you want to buy it, buy it. If you don’t, don’t. It really is that simple sometimes.
