Bitcoin Prices Predicted to Surge as Disruption in Crypto Mining to Push up Hashrate
Bitcoin prices ran up a gain of $316 since the regional flare up commenced to reach $28,292 on Tuesday from $27,976 on October 7
Bitcoin prices are predicted to see a spike in a near-term basis, fuelled by a sharp rise expected in the hashrate of the leading cryptocurrency due to the disruption in the crypto mining process in Israel – an active player in crypto mining – in the wake of the regional conflict, industry insiders said.
Besides, the regional conflict, contributing to a broader sense of global uncertainty, is also expected to potentially drive investors towards assets like Bitcoin (BTC), billed as “digital gold” in the new financial sector landscape – considered by many as a store of value in times of economic uncertainty.
A rise in Bitcoin hashrate, a pivotal metric for the blockchain network’s security, will boost investor confidence, potentially increasing market demand and Bitcoin price, industry experts said.
The Bitcoin hashrate refers to the computational power utilised by miners to validate and process transactions on the blockchain.
Bitcoin prices ran up a gain of $316 since the flare-up commenced to reach $28,292 on Tuesday from $27,976 on October 7.
The overall crypto market cap, however, remained flat at $1.09 trillion since the regional tension commenced.
“Israel is an active player in crypto mining and any disruption in the mining process may result in a sharp rise in Bitcoin hashrate. Any increase in BTC hashrate could have a direct impact on its price in the short term,” Manhar Garegret, Country Head- India and Global Partnerships at Liminal, a wallet infrastructure and custody solutions platform.
“Since the start of the Israel-Hamas conflict, we have not witnessed any significant fluctuation in the prices of digital assets but things may look different in the short-to-mid-term,” he said.
Garegret, however, added that the crypto market is driven by multiple factors, and the global geopolitical situation is only one of them.
Bitcoin slips amid geopolitical uncertainty
The global crypto market slipped by 0.5 percent in the immediate aftermath of the eruption of the conflict as investors panicked following the unexpected chain of events, impacting financial markets around the world.
The market panic also impacted BTC, leading to the currency losing its key support and slipping below the $27,000 mark for the first time this month.
“The overall crypto market is witnessing a downward trend as the Israel-Hamas conflict intensified,” Shivam Thakral, CEO of BuyUcoin, India’s second longest-running digital asset exchange.
“The geopolitical uncertainty may have a ripple effect on global financial markets and this may continue till Israel-Hamas decide to de-escalate the situation,” Thakral said.
Blockchain analysis cripples terrorist funding
Industry experts said outside of crypto markets, what was more notable though, was that the Israel-Hamas conflict showcased the ability of intelligence agencies to identify and restrict terrorist-owned digital asset wallets.
“By using Blockchain analysis, Israel intelligence agencies showcased a new way of crippling its attackers by cutting off their funding resources,” Garegret said.
Hamas is believed to have launched campaigns on social media to raise funds through crypto, and Israel, known for its tech expertise, blocked the crypto accounts used for Hamas funding.
The accounts used for illicit activities were easily identified with the help of support from popular exchanges like Binance and immediate action was taken by law enforcement agencies, industry insiders said.
