The Taliban have taken control of Afghanistan just two weeks before the United States was scheduled to start its two-decade war in the country. As Afghan security personnel equipped and trained by the US and its allies faded away, the insurgents rushed over the nation, taking all major cities in a couple of days. The rebels were driven out of power by the US-led invasion of Afghanistan in 2001, but they never departed. The Western-backed government that had ruled the country for 20 years crumbled after a recent blitz across the country. Afghans rushed to the airport, one of the final exit ways out of the country, fearful of the future. Most likely because US forces were scheduled to leave at the end of the month. For several years, the United States had been attempting to exit Afghanistan, its longest conflict. When American troops invaded to root out al-Qaida, which coordinated the 9/11 attacks while being harbored by the Taliban, they did it in a couple of months. Holding land and rebuilding a nation devastated by wars proved more challenging. As the United States' focus went to Iraq, the Taliban regrouped and, in recent years, took control of much of Afghanistan's country. Today, the Taliban's leadership uncertainty has led to a mass exodus of people from Afghanistan. The rise of the Taliban is a troubling development to say the least, but it's one that might be easy for investors and markets alike to ignore. Given Afghanistan’s lack of resources and legal global participation, this newest geopolitical event may not have as much economic impact on major players in world trade - like China or Russia- who don't rely heavily on Afghan goods for their economies. The latest news out of Kabul has sparked concern among some economists about how safe international investment can continue being with an unstable government overseeing what little there is left in terms of natural resources such as oil; many people are worried however that these new developments won't affect larger countries too deeply either way given they're less dependent financially upon Afghani products than most other. As they fear for their safety and protection in these uncertain times, many are hastily leaving Kabul Airport outfitted with only as much luggage as can be carried by hand. Thousands more have taken refuge at other airports across the country where hope springs eternal that they will receive speedy visas before being caught up in turf wars between various military factions vying for control over this war-torn nation. The Afghan situation worsened yesterday when hundreds of people attempted to exit the country owing to concern about what is going on behind closed doors within government offices now occupied by members of militaries who intend harm upon civilians living here among them; there was talk earlier today suggesting that not everyone would.
The Afghanistan crisis and its influence on the world economy
There is no aspect that has a negative impact on the financial markets like investor uncertainty. Investor confidence in Afghanistan could decline as a result of recent violence and the resignation of the president. Furthermore, several other countries, such as Germany, are beginning to expel their citizens. Investors, both foreign and domestic, are now showing much interest in the Afghan financial markets, which will have both short and medium-term consequences for the economy. Many investors may leave Afghanistan if the Taliban continue in power, as they are unsure of the working environment under the new Islamic authority. The financial markets would be affected on a worldwide scale as well. So far, the impacts of Afghanistan's instability may be seen in other regions of the world. Financial market indices are falling, and investors are waiting to see how world leaders will handle the situation. The FTSE 100 index fell 0.90 percent today, while the STOXX Europe 600 index fell 0.50 percent. So far today, the Dow Jones Industrial Average (DIJA) and the S&P 500 are down 0.065 percent and 0.23 percent, respectively. Another significant index that is now in the red is the NASDAQ composite, which is down 0.74 percent at the time of this post. This indicates that for the last 24 hours, most of the major global financial market indices have been trading in the red zone. The performance gives a clear picture of how the financial markets are currently performing and how investors are doing.
What the Afghan government’s collapse might mean for the U.S. stock market
According to data from Brown University's Watson Institute of International Public Affairs, stock market investors have been generally sanguine during the long-running conflict, which has cost an estimated $2.261 trillion and killed 241,000 people. Since the collapse of 2001, the Dow has risen almost 270 percent, the S& P 500 has risen more than 300 percent, and the Nasdaq Composite has risen more than 700 percent. It's worth mentioning that during that period, the benchmark 10-year was yielding between 4% and 5%. Military conflict hasn't always had an impact on markets in the past, and war's impact on investors' psyches, if any, hasn't always been evident. The backdrop, as well as the economic and market contexts, are frequently more influential. Since 2001, Northrop Grumman Corp.'s stock NOC, +0.53 percent has increased by nearly 880 percent, and Lockheed Martin Corp.'s stock LMT, +0.89 percent has increased by 834 percent, while Boeing Co. BA, +0.24 percent has increased by 439 percent, and General Dynamics Corp. GD, +0.93 percent has increased by over 422 percent, all of which have surpassed the overall marketplace.
Would the Taliban have a major impact on cryptocurrency or the stock market in the United States?
As the Taliban establishes new government and public organizations, Afghan crypto lovers prefer to operate in the shadows; they aren't even connected to one another. Afghanistan, on the other hand, has the highest Exposure and the outcome statistic of the Crypto Adoption Index of all Central Asian countries. Afghanistan can compete with the likes of the United Kingdom with a level of 0.13. It outperforms every European country, with the exception of Ukraine, by a large margin. The Digital Citizen Fund, created by two sisters, has been educating Afghans about digital technology, including blockchain, for years. As a result, some Afghans are utilising cryptocurrency as a safe investment and, more importantly, for financial transactions. Other "early consumers" purchase cryptocurrency with the help of relations in Gulf countries. At the same time, whether Bitcoin (BTC) and Ethereum (ETH) are mined in Afghanistan remains a mystery. Afghans and foreigners alike have been rushing to the airport to flee the capital following the Taliban takeover, which came after hours of negotiations with President Ashraf Ghani for a peaceful handover of power. Ghani eventually departed the country, and the Taliban said the Islamic Emirate of Afghanistan will be announced from the presidential palace soon. Unfortunately, most Afghans who were unable to withdraw their funds and depart the country have little recourse because they are dependent on irrational judgments made by third parties during a crisis. However, as Gradstein points out, the story could have turned out differently with Bitcoin and self-custody. People who saved their life savings in Bitcoin instead of fiat cash would also have been free to carry it around without requesting permission, but they would also benefit from increased market power over time. Bitcoin is perfectly positioned to reestablish freedom and power around the world, despite authoritarian regimes, destructive economic policies, war zones, and monetary colonialism. The disseminated electronic money that requires no permission from anybody can bring about long-term change in the five corners of the globe, but greater understanding of its benefits is required. Not only did some point out that Bitcoin or cryptocurrencies would have made it more difficult to seize and secure wealth, but the entire scenario may have been averted if the world had embraced distributed money. Bitcoin and other cryptocurrencies can be stored on virtual currencies the size of a USB thumb drive or digital wallet. To gain access to the funds, a user merely needs to keep in mind the relevant passcode or the key.
How BTC and other cryptocurrencies would have been helpful for residents of Afghanistan instead of cash
Hundreds of Kabul residents rushed to banks on August 15 to collect money from their bank accounts after Taliban fighters took control of the city and demanded the government's capitulation.
There are certain examples of people in Afghanistan using crypto. A 22-year-old Afghani boy, Farhan Hotak, he assisted his ten-member family in fleeing the southern Afghan province of Zabul and traveling 97 kilometers to a city near the Afghanistan - Pakistan border. But, unlike others who chose to flee the nation, once his relatives were secure, he turned around and returned to protect his people home and vlog to his thousands of Instagram followers about the developing times in Afghanistan. He's also been keeping a close check on his Binance crypto portfolio as the local currency level is increased to new lows and national bank closures actually make money withdrawals nearly impossible. He said that we don’t have platforms like PayPal, Venmo etc so he has to depend on other things. Money in Hotak's crypto wallet won't help him put food on the table because Afghanistan is still mostly a cash economy, but it will give him piece of mind that portion of his wealth is protected from domestic economic volatility. It also holds bigger benefits in the long run: access to the global market from within Afghanistan, some safeguards against skyrocketing inflation, and, most importantly, the chance to bet on himself and a future he didn't really believe was feasible before discovering about bitcoin. “I have a restricted number of resources with which to accomplish anything. I'm interested in the crypto sector because I've made a lot of money and believe I have a lot of potential to go much further,” he explained.
Another example of a 27-year-old who worked in a construction company. Musa Ramin was one of the people who waited outside a bank in a futile attempt to withdraw cash a few days before the Taliban stormed Kabul. But, unlike the other Afghans in line that day, he had put a chunk of his net worth into cryptocurrency months before. Ramin had previously been burned by a quickly declining currency, and decentralized digital money had shown to be a reliable hedge. Ramin became stuck in Turkey in 2020, on what was supposed to be a quick stopover on his way from London to Kabul. A mandated Covid quarantine of one week turned into six months He explained, "I converted all of my money to the lira." Ramin stated his capital was slashed in half once the Turkish currency began to spiral, and he was compelled to conserve it. “That's when I came across bitcoin.” Ramin understood he needed to find alternate means of supporting himself while stuck in Turkey due to the pandemic-related lockdown because all flights had been cancelled and he had no other options for exit. That's when he began trading cryptocurrency. “I lost a lot of money at first,” he admitted. But, owing to Twitter and YouTube courses, he's gotten the hang of maintaining his digital products. Even after returning to Kabul, the 27-year-old claims to have focused only on cryptocurrency trading. Spot exposure accounts for 80% of his crypto capital, largely in major coins such as bitcoin, Ethereum, and Binance coin. He trades futures with the remaining 20%. “I was collecting more money in a month in crypto than I was in a year in construction,” Ramin added, while he acknowledged the risk. “It's simple to get money in crypto, but maintaining that money is challenging.” He believes that virtual tokens are the safest hedge against political unpredictability, and he intends to grow his exposure to digital currencies to as much as 40% of his overall net worth in the following year. Web searches for "bitcoin" and "crypto currency" in Afghanistan spiked in July, shortly before the coup in Kabul, according to Web analytics data. However, because this tool is used to measure interest, the peak could belong to ten or 100,000 views.
Taliban Considers Afghanistan a Safe Zone for Crypto Entrepreneurs
The unexpected downfall of Afghanistan has raised worries about the United States' standing among its allies and foes, as investors and analysts questioned what it means for the dollar and other assets in the years and decades ahead. After 20 years of US involvement, more than $1 trillion in investment, and tens of thousands of lives lost, it looked that the instability surrounding the Taliban's assumption of power was having just a minor impact on world economies. “The Islamic Emirate of Afghanistan will not remain stuck in a savage past,” claimed a Taliban representative for an exclusive statement. We warmly invite western crypto entrepreneurs to our country to assist us in moving forward. Those who invest in our country will be given special visas and rights.” The news that Afghanistan could become a potential Islamic, crypto-powered utopia sent bitcoin soaring. Many experts believe this will act as a trigger, propelling Bitcoin into the six-figure range for the first time. Insight about crypto use in Afghanistan is difficult to come by. Apart from the fact that determining bitcoin adoption at the grassroots level is difficult, people go to great lengths to conceal their identities. To camouflage their regional digital imprint, some Afghans, for example, used a virtual private network, or VPN, to hide their IP address. Moreover, unlike many crypto supporters who were outspoken and community-driven, digital currency advocates in Afghanistan frequently wouldn't want others to know about their existence.
Conclusion
The question of when crypto will become a common place is really interesting. We know that the Taliban has returned to Afghanistan, and it's not looking good for them or anyone else in this area who isn't a member of ISIS. The rest of us are wondering what life would be like with cryptocurrencies becoming mainstream currency , but there won't have been much time between now and when they do dominate before things start getting messed up if we don't address some key issues first: religion-based camps could spring up all across the world as soon as cryptocurrency dominates; rebels based on financial exclusion may set themselves apart from everyone else equally quickly unless they find their own form somewhere down the line. There somehow may be a positive as well as a negative impact on both the stock market and cryptocurrency as many residents in Afghanistan have been benefited by cryptocurrency and somehow Taliban’s do also know its importance.
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