Trump Plan for Gaza and Its Impact on Market Risk Calculations

We examine the growing complexity of the geopolitical environment in the Middle East, where tensions between Israel and Palestine have consistently caused volatility in the cryptocurrency market. However, a significant change is now on the horizon with Trump's plan to deploy 20,000 troops of peacekeeping forces in Gaza, a project that could reverse some of the region's negative risk trends. It's worth noting that this effort was designed as a multinational operation, not a unilateral US deployment, and five countries have already committed troops: Indonesia, Morocco, Kazakhstan, Kosovo, and Albania.

Indonesia's contribution is particularly notable, as it initially committed to deploying between 20,000 and 8,000 personnel, but ultimately confirmed the lower number. However, it's not just about deploying well-trained troops; Indonesia's contingent includes specialized engineering and medical units, suggesting that this effort goes beyond security and focuses on rebuilding the territory.

Notably, this multilateral force is designed to comprise 20,000 soldiers and 12,000 locally-trained police officers. Although the plan is gradual, starting with 10 to 20 personnel in critical areas such as Rafah, it is expected to expand over time. Moreover, the inaugural meeting of the Peace Council in February 2026 managed to raise $7 billion in commitments for reconstruction funding.

While creating a peacekeeping force does not eliminate all geopolitical risk in the region, it could reduce one of the most persistent factors of volatility that have affected investors since 2023. On the other hand, the $7 billion investment in reconstruction could have significant consequences for the market, as that capital must come from somewhere, and the source of those funds could influence capital flows and, ultimately, market risk.