Crypto Prices Today: Bitcoin price surged as investors once again appeared to see volatile crypto as a safe haven for their money and Russians and Ukrainians look for options substitute for their country’s financial institutions. After initially dropping to around $34,000 following Russia’s entry into Ukraine last week, Bitcoin price rallied around 10% higher on Monday and is now up more than 25% over the past week, to $43,900 on Wednesday afternoon. . Other cryptocurrencies have also skyrocketed.
Russians are exchanging their rapidly depreciating ruble for bitcoin to try to mitigate the impact of economic sanctions the international community has imposed on their country’s attack on Ukraine. The Ukrainian government has restricted citizens’ ability to conduct electronic fund transactions, so Ukrainians are also turning to bitcoin and other cryptocurrencies. They are also buying stablecoins whose value is pegged to the US dollar.
Before the Russian invasion, bitcoin was trading in a similar way to other risky assets such as technology stocks. Investors have been expecting the Federal Reserve to start raising interest rates soon in response to high inflation. They move money out of more invested investments like bitcoin and buy stocks in banks other industries that tend to do well when rates rise.
That changed after the invasion as Western countries responded with a series of steps that limited the access of the Russian government and its oligarchs to the financial system. Those moves have had a ripple effect on Russians, who have lined up at banks and ATMs to withdraw money.
Blockchain data and analytics firm Coin Metrics says the volume of bitcoin trades in exchange for both rubles and Ukrainian hryvnia has spiked in recent days, but such transactions still represent only a fraction of the time. in total volume. Investors in general are looking at bitcoin and other cryptocurrencies as a good place to store assets.
Kyle Waters, a research analyst at Coin Metrics, said that crypto trading data confirms that recent geopolitical events have increased demand for cryptocurrencies “overall,” which can be move anywhere and without the need for a third party.
“This can happen to anyone, and can certainly include Russian and Ukrainian citizens on a daily basis trying to get out of a currency devaluation,” Waters said.
Some analysts and media reports have speculated that Russian oligarchs could use cryptocurrencies to avoid sanctions. On Wednesday, the Justice Department said it was setting up a task force to, among other things, try to thwart any attempt to use cryptocurrency to evade sanctions.
Some analysts suggest that this bitcoin rally may have been close to hitting a ceiling as energy prices skyrocketed as the Russia-Ukraine conflict flared up. Oil spiked to $111 a barrel on Wednesday, its highest level in more than a decade. Bitcoin mining, where computers are used to verify bitcoin transactions, consume a huge amount of energy.
Oanda’s Edward Moya in a market brief said: “Bitcoin has had a nice rally but the burnout during this rally will likely resolve as rising energy costs are likely to may affect some overseas mining operations.
In addition to regional and broader crypto market activity, millions of dollars in crypto have been donated to Ukraine since the invasion.
Elliptic, a company that tracks cryptocurrency transactions, said that $33.8 million worth of digital money has been donated to the Ukrainian government and NGOs there since its inception. beginning of the Russian invasion, nearly a third of which on Tuesday.
