Hi. Eric here. 

Crypto is adapting to the grim reality of the escalating war in the Middle East. 

Some of those changes were expected, such as the annual Token2049 event in Dubai being postponed or the TON Network cancelling its Gateway Dubai event. 

People obviously started to think long and hard about the pros and cons of risking their personal safety to attend industry events in the beleaguered region.

Other changes may have come as a surprise. 

Take Bitcoin. 

The top cryptocurrency has surged almost 10% in the two weeks since joint US and Israeli airstrikes took out Ali Khamenei, the former supreme leader of Iran, on February 28 and triggered the region-spanning conflict.

That’s surprising. In previous conflicts, such as Russia’s invasion of Ukraine in 2022, the $1.4 billion asset lost value. 

This could simply, as Laurens Fraussen, a research analyst with crypto data firm Kaiko, told Liam Kelly, be due to “exhaustion from all the geopolitical tensions.”

Yet, in a vote of confidence, Bitcoin traders are cautiously starting to price in a rally to $80,000 by the end of June on options-trading platforms. 

To be sure, there is still a lot that could go wrong. 

For instance, as Mathew Di Salvo reported this week, Iran warned that the price for oil could double to $200 per barrel if the US and Israel kept attacking the nation. If that happens, energy prices will spike which will discourage central banks around the world from cutting interest rates. 

High interest rates are usually bad for Bitcoin as it restricts the liquidity the asset needs to rally. The chances that the Federal Reserve will cut interest rates have dropped from just over 30% last Friday to 25% today, according to the CME FedWatch tool.

But what may surprise some of the crypto industry’s staunchest critics is the fact that it’s still ticking off wins despite the gloomy outlook. 

This week, BlackRock gave Ethereum another vote of confidence by launching an exchange-traded fund that gives investors a chance to capture staking rewards. 

In another win for the industry, Ripple reportedly saw its valuation surge by 25% to $50 billion after the firm launched a $750 million shares buyback programme.

We have also seen the war create trading opportunities in decentralised crypto exchanges. On Hyperliquid traders have rushed in to trade tokenised oil perpetuals and metals to the tune of hundreds of millions of dollars.

The world looks like a frightening place now, but I personally find some solace in the fact that people keep building. 

Despite the horrors of what the news broadcasts show us, crypto keeps innovating.

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Binance filed a defamation lawsuit against The Wall Street Journal on Wednesday over the newspaper’s reporting in February that Binance fired employees after they uncovered $1.7 billion in crypto tied to sanctioned entities had flowed through the platform.

A spokesperson for the Wall Street Journal told DL News: “We stand by our reporting.“

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