How are cryptocurrencies affected during wartime?
When wars break out or political crises escalate between countries, market behavior changes significantly. This includes the cryptocurrency market, which has become an important part of the global economy, especially among young investors and users in developing countries.
Do cryptocurrencies get affected during war?
Mostly, yes at first. When any significant tension or military escalation occurs, the market feels fear, and investors start selling their assets to reduce risks. This includes cryptocurrencies like Bitcoin and Ethereum. The result is:
• Rapid price decline.
• Increased volatility.
• Temporary liquidity exit from the market.
Why does this drop happen?
Because people in crises seek safety, they turn to traditional assets like gold or the dollar. Cryptocurrencies are considered high-risk assets, so they are temporarily avoided.
Can cryptocurrencies benefit later?
In many cases, yes. After the initial fear subsides, some begin to use cryptocurrencies for many reasons, including:
• Difficulty accessing banks or transferring money.
• Loss of confidence in the local currency or banking systems.
• Desire to preserve money in a decentralized and secure manner.
In these cases, some cryptocurrencies turn into an effective alternative to gold or even traditional money.
What makes Bitcoin special during crises?
Bitcoin does not follow any government or central bank. Therefore, in cases of chaos, inflation, or banking restrictions, it can be used to transfer or preserve value. This is what has sometimes earned it the nickname 'digital gold.'
What does a smart investor do during war?
• Does not enter the market without a clear plan.
• Follows the news continuously.
• Does not use all capital at once.
• Chooses currencies with strong projects and a long history.
Summary
During times of war, the cryptocurrency market goes through a temporary shock phase, but may eventually turn into an alternative and smart option. The important thing is to act cautiously and understand that fear does not mean the end of the market, but rather an opportunity for those who know how to move calmly.