ICBM EAR Report for 22 Feb 2025 was originally published on Global Security Review.

The conflict caused widespread destruction and displacement, exacerbating the long-standing humanitarian crisis in the region. It then extended into Lebanon, where Iran-backed Hezbollah engaged in hostilities against Israel. On November 27, 2024, following months of intense confrontations, the US brokered a 60-day ceasefire, allowing thousands of displaced individuals to return to southern Lebanon. However, the ceasefire’s durability remains uncertain, with speculation concerning potential violations and the broader implications for regional stability.

In Syria, rebels led by Hayat Tahrir al-Sham (HTS) capitalized on regional unrest to seize control of key areas, including Aleppo, Idlib, and Hama. The Assad regime’s traditional allies—Iran, Hezbollah, and Russia—were preoccupied with their own conflicts, allowing the Assad regime’s overthrow. HTS, which is presumably anti-Iran, is making Syria more difficult for Iran to influence. Iranian influence allowed the regime to transit armaments to Hezbollah in Lebanon.

Over the past year, Israel intensified its military operations to degrade Iran’s proxy forces across the Middle East, employing a combination of airstrikes, special operations, and strategic assassinations. On October 26, 2024, Israel launched Operation Days of Repentance, targeting over 20 locations in Iran, Iraq, and Syria. This operation significantly damaged Iran’s capabilities for missile production and utilization of its air defense systems.

This also included the destruction of long-range surface-to-air missile batteries and detection radars. Israeli operations employed targeted assassinations to eliminate key figures within Iran’s proxy networks, including Hassan Nasrallah, who was eliminated in an airstrike in Beirut on September 27, 2024, along with other senior officials. Previously, on July 31, 2024, in an operation attributed to Israel, another notable assassination in Tehran, Iran, eliminated Ismail Haniyeh, the political leader of Hamas.

Furthermore, Israeli special forces conducted covert special operations and missions to disrupt Iran’s proxy activities. For instance, in September 2024, Israeli commandos raided an underground facility near Masyaf, Syria, known for its weapons development and potential use by Iran and Hezbollah to produce precision-guided missiles. Israeli forces also captured Ali Soleiman al-Assi in southern Syria in November, accusing him of aiding Iranian intelligence efforts.

Despite the systematic degradation of Iran’s proxy forces in the region, Iran continues to advance its nuclear program, posing a significant threat to the region. The head of France’s foreign intelligence agency stated that Iran’s nuclear proliferation poses a serious threat in the coming months, and both France and the United Kingdom are developing strategies to counter this threat.

However, the current geopolitical and military dynamics may present a unique opportunity for Israel to strike Iran, with a focus on neutralizing its nuclear and regional threats. A combination of factors, particularly the expectation of a West-backed Israeli military action to prevent Iran from acquiring nuclear weapons, can underpin the reasoning.

Degraded Proxy Capabilities

In the past few months, Israel has effectively degraded the operational strength of Iranian-affiliated groups such as Hezbollah, Hamas, and Shia militias in Syria and Iraq. Moreover, the precise eliminations of various leadership divisions within Hezbollah and Hamas significantly undermine the command frameworks of Iran’s affiliates and their capacity to orchestrate operations.

Furthermore, Israeli precision strikes and covert operations effectively dismantled essential facilities supporting these groups, thereby diminishing their capacity for swift counteractions. With its proxies weakened, Iran is likely encountering difficulties in coordinating a robust regional strategy.

Israeli operations significantly degraded Iran’s air defense systems, including their Russian S-300s and other advanced defense platforms. This leaves critical facilities, including nuclear sites like Natanz and Fordow, more exposed to precision strikes aimed at eliminating Iran’s nuclear threat. Some Western experts believe that a successful strike now could potentially delay Iran’s nuclear ambitions for many years.

Domestically, Iran is also facing severe economic challenges, including unemployment, inflation, and widespread dissatisfaction among its population, which was further fuelled by protests over the past two years as a result of the dire economic situation of the country as well as the increasing repression by the regime. Ongoing protests and internal dissent are already straining the regime’s resources. Analysts believe that Iran’s leadership is significantly preoccupied with maintaining internal stability rather than launching a significant retaliatory campaign.

Overall, reports indicate that Iran’s national funds are nearly depleted, along with most of its financial resources being drained by its support to military and proxy activities. In addition, energy shortages, including electricity and gas, have fueled Iran’s economic crisis, thus, severely impacting its citizens and therefore further increasing civil unrest towards the regime.

That said, there is already a growing gap between the government and the public. This gap spans economic, political, and social aspects along with the increasing dissatisfaction over the government’s inability to address internal civil needs in parallel to the increasing repression by the regime.

Iran’s nuclear program is progressing at a rapid pace, with the emergence of reports indicating the installation of advanced centrifuges and uranium enrichment nearing the weapons-grade levels. Israel and the West may be seeing this as a narrowing window of opportunity to act decisively before Iran develops a nuclear weapon or possesses weapons-grade uranium. The possibility of delaying a firm action could allow Iran to fortify its facilities further or even achieve a nuclear breakout.

Iran’s foreign minister recently stated that if the West proceeds with the threat of reimposing all United Nations sanctions, Iran is likely to move toward possessing its own nuclear weapons. This statement raises concerns about the effectiveness of the sanctions against Iran over the past years in advancing its nuclear objectives.

The ceasefire with Hezbollah and reduced clashes with Hamas is expected to establish a brief respite in regional conflicts. However, the US and European allies are growing increasingly exasperated with Iran’s unwillingness to engage on its nuclear program, which could render decisive action more acceptable on the diplomatic front. Arab nations, while cautious, share concerns about Iran’s regional influence and the progress in the development of its nuclear capabilities.

Although Iran held a new round of nuclear talks with France, Germany, and the United Kingdom on November 29, 2024, talks resulted in minimal progress and no immediate course of action. This underscores the fact that diplomatic discussions with Iran yielded nothing in recent years, except for Iran’s continued advancement in its nuclear aspirations.

Furthermore, this will likely increase Europe’s shift towards adopting a hard-line position regarding engagement with Iran on nuclear issues. In this respect, it was reported that US President-elect Donald Trump is weighing options in countering Iran’s nuclear developments, including the option for a preventive airstrike.

Recent Israeli successes against Iran and its proxies created strategic momentum. Waiting too long could allow Iran to rebuild its defenses and recover its regional proxies to actively engage in attrition warfare with American and Israeli forces in the Middle East. This could occur while potentially working covertly in strengthening its own nuclear program. In this respect, some security analysts may argue that a Western-supported Israeli strike would leverage the latter’s current military and intelligence superiority in countering Iran’s regional proxies.

While highlighting these opportunities, it is also important to anticipate the possible risks, including the regional escalation involving Hezbollah, Yemen’s Houthis, Iraqi militias, and Syria. The risk of fully strained international relations with Iran also exists, especially if a strike triggers widespread civilian casualties or destabilizes global oil markets. Furthermore, a military action could arguably accelerate Iran’s nuclear ambitions clandestinely.

Those advocating for prompt action are likely to contend that the dangers of failing to act against Iran surpass the dangers of launching a pre-emptive strike before it is too late, putting Iran in a position to acquire nuclear weapons or nuclear-grade enriched uranium. It can be argued that the current moment is a fleeting alignment of weakened Iranian proxies, vulnerable defenses, and growing nuclear threats, making it a strategically opportune time to act decisively in pressuring Iran to refrain from pursuing its nuclear program. Finally, with President’s Trump return, it can be assumed that the new US administration may not have the immediate intention to pursue diplomacy with Iran, instead it would be more likely that a “maximum pressure” campaign would be adopted.

Mohamed ELDoh, PhD, is a business development and consulting professional in the defense and security sector. He regularly authors articles addressing defense cooperation, counterterrorism, geopolitics, and emerging security threats in the Middle East and Africa.

Is This the Right Moment to Act Against Iran on All Fronts? was originally published on Global Security Review.

Too few Americans contemplate the role of digital currency volatility in acting as a barrier or an enabler to nuclear deterrence. The reality is that there are opportunities and risks that volatile cryptocurrency plays in the strategic calculus of nuclear states.

Cryptocurrency and Geopolitical Shifts

Cryptocurrencies are decentralized and borderless, challenging traditional financial systems and reshaping how states interact economically. Their volatility stems from market immaturity, speculative trading, regulatory uncertainties, and evolution of these ever-changing technologies. Essentially created to prevent intermediaries, like banks and financial institutions, cryptocurrencies lay the foundation for trustless transactions for illicit activities.

This volatile mix of person-to-person transactions and zero oversight introduces both unpredictability and opportunity, raising questions about their implications for nuclear deterrence, which now must deal with a domain that includes ungoverned access to financial streams that can be used by state and non-state actors to engage in elicit behavior that undermines deterrence stability.

Nuclear deterrence relies on a delicate balance of power, with states maintaining assured second-strike capabilities to dissuade adversaries from initiating conflict. This balance hinges on credibility and capability. Cryptocurrencies, with their volatile swings in value, could serve to undermine stability within a country or enable elicit actors to engage in a range of nonnuclear actions that undermine strategic stability.

The Risks of Cryptocurrency Volatility as a Barrier

Cryptocurrency volatility can act as a barrier to nuclear deterrence by creating financial instability and undermining a state’s ability to project economic power. Traditional nuclear powers depend on stable economies to maintain robust defense capabilities, fund deterrence strategies, and support diplomatic efforts. Sharp and unpredictable fluctuations in digital assets can undermine financial stability, weakening a state’s capacity to fund critical defense initiatives.

For the United States, crypto is not a major issue currently. But, for North Korea, who funds its nuclear program through elicit activities, crypto is important. Proliferators also use crypto to conduct activity. Instability in crypto makes illicit activity even more high stakes and unpredictable.

Instability creates advantages for state and non-state actors to exploit cryptocurrency markets for nefarious purposes, such as evading sanctions, financing proliferation, and bypassing traditional financial controls. The decentralized nature of cryptocurrencies complicates efforts to monitor, track, and regulate illicit activities, potentially undermining efforts to prevent the spread of nuclear weapons or restrict financing for state and non-state actors pursuing destabilizing weapons programs.

Cryptocurrency instability also presents a challenge to strategic stability through cyber threats. If critical financial systems or exchanges are disrupted, or if adversaries manipulate markets to harm a nation’s economy, it could create economic shocks severe enough to destabilize deterrence relationships, increase miscalculation risks, or fuel insecurity-driven arms build-ups.

The Darknet and Conflict Escalation

Darknet cryptocurrency markets empower bad actors by offering anonymity and decentralized financial tools, enabling a wide range of conflict-escalating activities. These markets facilitate the purchase of illegal arms, military-grade technology, and hacking tools, often used to destabilize regions and target critical infrastructure (command-and-control systems) through cyberattacks.

Terror organizations leverage cryptocurrencies for anonymous funding, allowing them to finance operations, recruit globally, and expand their influence. Sanctioned entities exploit these markets to bypass international restrictions and acquire resources that fuel aggressive actions.

The ability to transact anonymously with cryptocurrencies also shields organized crime, including narcotics and human trafficking, whose revenues often fund conflict zones and insurgent groups. Covert exchanges on the darknet can increase espionage, destabilize international relations, and provoke hostilities to serve a radically motivated agenda.

In parallel, extremist groups utilize these platforms to spread propaganda, incite violence, and radicalize populations, further destabilizing fragile regions. The combination of anonymity, decentralized systems, and hidden economies presents a formidable challenge for global security efforts aimed at conflict prevention and stability.

Cryptocurrency as an Enabler of Nuclear Deterrence

On the other hand, cryptocurrency volatility also opens new avenues for strengthening nuclear deterrence through financial resilience and innovation. The decentralized nature of digital assets can enable states to diversify their financial resources and reduce dependency on traditional systems that might be vulnerable to adversarial influence or geopolitical tensions. In times of economic crisis or sanctions, cryptocurrencies can provide states with alternative means to maintain fiscal stability, thus supporting their deterrent capabilities. Countering bad activities with good can be as challenging as the reliance on traditional financial stability for positive security assurance.

Furthermore, blockchain technology, which underpins cryptocurrencies, offers potential for transparency, accountability, and verification mechanisms in arms control agreements. By leveraging blockchain, states can create tamper-proof records for tracking nuclear materials, enhancing verification regimes, and building trust between adversaries. The volatility of digital assets may fuel innovation and drive investment into these applications, ultimately strengthening nuclear stability and deterrence structures.

Balancing the Risks and Opportunities

While the volatility of cryptocurrencies poses undeniable risks, it is essential to approach them with a nuanced perspective to find the right balance between risk and reward. Policymakers must strike a balance between leveraging the opportunities that digital assets present and mitigating their risks to global security. Collaborative efforts to regulate and stabilize cryptocurrency markets can reduce the likelihood of financial instability while harnessing the potential of decentralized systems.

In addition, enhanced cybersecurity measures must accompany any state or multilateral effort to integrate cryptocurrency into the financial systems that underpin deterrence capabilities. Protecting digital infrastructure against malicious actors will ensure that the advantages of decentralized assets are not overshadowed by their exploitation for destabilizing purposes.

A New Strategic Frontier

The volatility of cryptocurrency markets is both a challenge and a frontier for instability of nuclear deterrence. While it poses risks through financial instability, illicit use, and cyber threats, it also offers opportunities for financial resilience, innovation, and transparency. In today’s evolving digital environment, nations must adapt to this dual-edged sword, developing strategies that incorporate the volatility of digital assets into a comprehensive approach to deterrence.

Ultimately, whether cryptocurrencies become a barrier or enabler of nuclear deterrence depends on how nations, regions, and regulators in the broader international community respond to this evolving challenge. By advocating cooperation, innovation, and regulation, cryptocurrencies can strengthen global security architectures and contribute to a stable nuclear order—turning volatility into a force for strategic stability and peace.

Greg Sharpe is the Marketing and Communications Director at the National Institute for Deterrence Studies. The views expressed in this article are his own.

The Volatility of Cryptocurrency: Barrier or Enabler of Nuclear Escalation? was originally published on Global Security Review.