Israel’s Crypto Economy Booms Amid National Crisis

Israel’s cryptocurrency market has demonstrated a fundamental transformation in user behavior following the October 7, 2023 attacks, with transaction volumes consistently exceeding forecasts by an average of $0.66 billion more per month than predicted. According to blockchain analytics firm Chainalysis, actual crypto activity surpassed anticipated levels by 60.4% on average, representing not just a temporary crisis response but a lasting behavioral shift among Israeli digital asset users. This sustained growth pattern has continued through 2024 and into 2025, positioning cryptocurrencies as a financial refuge during periods of national uncertainty.

The analysis by transfer size reveals that this expansion is overwhelmingly retail-driven. Small transfers under $1,000 and mid-range transfers between $1,000 and $10,000 show the most dramatic increases. By early 2025, small retail transfers reached nearly six times their January 2022 baseline, while mid-range retail activity grew roughly four to five times over the same period. While institutional and professional transaction segments also increased, their growth rates were comparatively restrained, underscoring the retail-led nature of Israel’s crypto boom.

Chainalysis noted that this pattern aligns with trends observed in other countries facing geopolitical disruptions, such as Ukraine and Iran, where citizens have turned to cryptocurrencies as alternative financial tools during times of crisis. The consistent outperformance of actual transaction volumes compared to forecasts—with pre-crisis deviations averaging just -0.3%—demonstrates a fundamental shift in how Israeli citizens perceive and utilize digital assets during periods of national stress.

Beyond Israel, the Middle East and North Africa region presents three distinct narratives of cryptocurrency adoption. Turkey leads the regional markets with crypto inflows reaching approximately $878 billion by mid-2025, despite ongoing currency devaluation and inflation challenges. However, Turkey’s market shows a concerning divergence: while institutional adoption remains strong, retail participation has contracted sharply with small and large retail transactions declining by 2.3% and 1.6% respectively, and professional trader growth plummeting nearly 90%.

The United Arab Emirates presents a contrasting story of balanced growth, with its crypto economy expanding by 33% between 2024 and 2025, receiving over $56 billion in inflows. The UAE’s growth is primarily driven by large institutional transactions, which increased 54.7%, and institutional transfers, up 37.2%. Meanwhile, merchant services saw substantial retail adoption, with small retail transfers under $1,000 growing 88.1%, large retail transfers increasing 83.6%, and professional transfers rising 79.5%. This indicates the UAE is emerging as a regulated crypto hub where institutional adoption coexists with expanding everyday transactional use.

Iran’s crypto ecosystem continued its expansion despite sanctions, economic pressures, and growing isolation from global exchanges, with mid-2025 volumes up 11.8% from 2024. The market is dominated by local exchanges, with Nobitex.ir accounting for 54.2% of inflows. The sector demonstrated resilience despite challenges, including a $90 million Nobitex hack in early 2025, maintaining stable growth amid increasing economic isolation.

The Israeli experience demonstrates how digital assets can serve as financial tools during geopolitical disruptions. The sustained nature of Israel’s crypto growth—extending well beyond initial crisis response—suggests a permanent shift in how citizens approach financial security. Unlike traditional safe-haven assets, cryptocurrencies offer accessibility and borderless transactions that appeal particularly to retail investors during periods of national uncertainty.

The regional comparison highlights different adoption drivers across MENA markets. While Israel’s growth is retail-driven and crisis-responsive, Turkey shows institutional resilience amid retail contraction, and the UAE demonstrates balanced institutional and retail growth within a regulated framework. Iran’s continued expansion despite sanctions underscores crypto’s role in circumventing financial isolation. These varied patterns suggest that digital assets are evolving to meet diverse regional needs, from crisis response in Israel to institutional development in the UAE and financial survival in Iran.

Chainalysis data confirms that the cryptocurrency market in crisis-affected regions is not merely reacting to temporary conditions but establishing new financial behaviors. The $713 billion in crypto inflows into Israel between 2024-2025, combined with similar patterns in other stressed economies, positions digital assets as legitimate alternatives to traditional finance in unstable environments. As geopolitical tensions continue to affect various regions, the role of cryptocurrencies as financial refuges appears to be cementing into a lasting global trend.