Palestinians do not have an independent currency, and rely on the Israeli shekel and Jordanian dinar.
An unidentified Hamas official said there has been a "spike" in the past month, the Wall Street Journal reported.
Banks in Israel and around the world are restricting business relationships with what they consider to be risky clients.
The report from an Israeli organisation claims the group used bitcoin to avoid sanctions, offer a degree of anonymity to donors and enable cross-border money transfers.
Israel's political backdrop gave attendees of Tel Aviv Blockchain Week an opportunity to ponder the duality of today's bitcoin movement.
Terrorists are using bitcoin, but they aren't the only ones. Here's the real story about bitcoin usage in Palestine.
Crypto startup Orbs has been working with the Trump administration to explore blockchain solutions related to the Israeli–Palestinian conflict.
For a small community of users in the occupied territories, bitcoin has become an economic lifeline to the outside world. But it can do only so much.
Palestine's monetary authority is reportedly looking to create its own digital currency.