On Thursday, Bitcoin sank to its lowest level in a month after Russian forces fired missiles at numerous Ukrainian cities and landed troops on the country’s coast, causing a sell-off in risky assets and propelling oil prices beyond $100 a barrel.
Bitcoin dropped as much as 7.9% to $34,324, its lowest level since January 24, and was down 4.9 percent at the time of writing. Smaller coins that usually move in lockstep with bitcoin plummeted as well, with ether shedding as much as 10.8% of its value.
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Vladimir Putin, Russia’s president, has authorized a “special military operation” in the country’s east. Following the strikes, the US and its partners would slap “serious sanctions” on Russia, according to US Vice President Joe Biden. As investors sought perceived safe-haven assets, global stocks and US government rates plummeted, while the currency, gold, and oil prices soared. European stocks fell 3% on their own.
While proponents of bitcoin claim it works as a safe haven from geopolitical concerns, it frequently moves in lockstep with other risky assets. Its drop on Thursday pushed its losses since hitting a high of $69,000 in November above 50%.
Cryptocurrencies continued to fall as a result of Russia’s attacks on targets around Ukraine, with Bitcoin hitting a one-month low.
After Vladimir Putin’s campaign to demilitarise Ukraine began with a salvo of missile attacks on Thursday, the largest token slid as high as 8.5 percent to $34,337. While Bitcoin has recovered some of its losses, it is still about 50% below its all-time high reached in November. Ether, which was placed second, fell as much as 12% to $2,301.84. Other coins, including XRP, Cardano, and Solana, were also affected.
Disturbance to Crypto
The idea that cryptocurrencies offer a hedge in times of turmoil has been weakened by Bitcoin’s swings in recent weeks of growing geopolitical tensions. According to Ben Casein, head of research and strategy at crypto exchange AAX, this is due in large part to its expanding integration into global financial markets, which causes it to move more like other risk assets.
According to Jonathan Tse, head of trading at crypto platform Copper.co, the Russia-Ukraine crisis “may drive prices much lower in the immediate term.” “However, it could be just what’s required to find a bottom sooner rather than waiting for a crypto winter to hit prices.”
In the event of further losses, the next critical mark to watch for Bitcoin is $28,000 to $29,000, according to Vijay Ayyar, vice president of corporate development at Luno, a crypto platform. “We could be looking at significantly lower values in the low $20,000s and below” if that threshold is passed.
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