Retail Investors Lead Israel’s Crypto Boom During Periods of National Uncertainty

Israel’s cryptocurrency economy has experienced significant growth, particularly following the national crisis triggered by the October 7, 2023, attacks, according to a recent Chainalysis report.

From 2024 to 2025, the country saw crypto inflows surpassing $713 billion in a steady expansion in line with prior trends. Before the attacks, transaction volumes in Israel closely matched expected activity, with deviations averaging just -0.3%. Following the attacks, however, volumes consistently exceeded forecasts and averaged $0.66 billion more per month than predicted.

Israel’s Retail Crypto Activity Explodes

Overall, actual activity surpassed anticipated levels by 60.4% on average, demonstrating a constant increase rather than a temporary surge in response to crisis conditions. This pattern has continued through 2024 and into 2025, in what Chainalysis has deemed to be a lasting behavioral shift among Israeli crypto users and positioning digital assets as a financial refuge during periods of national uncertainty.

The blockchain data platform noted that similar trends have been observed in other countries facing crises, such as Ukraine and Iran, where crypto adoption spiked in response to geopolitical disruptions.

Analysis by transfer size indicates that this growth is largely retail-driven. Small transfers of under $1,000 and mid-range transfers between $1,000 and $10,000 show the most significant spikes. Small retail transfers reached nearly six times their January 2022 baseline in early 2025, while mid-range retail activity grew roughly four to five times over the same period.

Institutional and professional transaction segments also increased, but at a comparatively restrained rate. The retail-led nature of this growth is similar to patterns seen in other regions affected by conflict or economic stress, as individual citizens turned to cryptocurrencies as alternative financial tools.

Zooming Out: MENA Region

Besides Israel, the MENA region’s major crypto markets present three distinct narratives of adoption. Turkey, for one, has seen crypto inflows soar to roughly $878 billion by mid-2025, as it outpaced all regional markets despite ongoing currency devaluation and inflation. While institutional adoption has remained strong, retail participation has contracted sharply as small and large retail transactions declined by 2.3% and 1.6%, respectively, and professional trader growth dropped nearly 90%.

This divergence reflects affordability challenges, tighter regulations from 2024, and evolving market behavior. Simultaneously, speculative altcoin trading surged from $50 million to over $240 million by mid-2025, which could mean that remaining participants are seeking higher yields amid economic pressures.

Meanwhile, the UAE’s crypto economy expanded by 33% between 2024 and 2025 as it received over $56 billion in inflows. Growth is primarily driven by large institutional transactions, which increased 54.7%, and institutional transfers, up 37.2%. Merchant services, however, saw substantial retail adoption, as seen with small retail transfers (<$1,000), which grew 88.1%, large retail transfers 83.6%, and professional transfers 79.5%.

This indicates a divergence between general crypto usage and commercial applications, as the UAE appears to be quietly emerging as a regulated crypto hub where institutional adoption coexists with expanding everyday transactional use.

Iran’s crypto ecosystem also continued expanding, despite sanctions, economic pressures, and growing isolation from global exchanges, with mid-2025 volumes up 11.8% from 2024. Local exchanges dominate the market: Nobitex.ir accounts for 54.2% of inflows. The sector endured challenges, including a $90 million Nobitex hack in early 2025, but overall growth remained stable.

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