As a Cryptocurrency enthusiast, Investor or “Hodler”, the question of How The Ukraine-Russia War Will Affect The Price Of Bitcoin and Other Cryptocurrency must have crossed your thought, in the face of the ongoing conflict in the Eastern European Sub-bloc.
Ukraine and Russia hold in total approximately 30 Billion US Dollars worth of Bitcoin at the current trading price of $39,000. This is less than 1% of the total Market Capitalization of the flagship Crypto asset. But of course it takes more than the worth of their stake in the Crypto Market to cause significant change in the asset’s price trend.
Necessity is the mother of invention, just as circumstance is the trigger of improvisation. Before we go into the Probable Effects of the Russia-Ukraine War on the price trend of Bitcoin and other Cryptocurrency, it is important to note down the contemporary effects of the war on the Crypto Sphere and the resultant improvisation that it brought with it.
Current Impacts Of The Ukraine Russia War On The Price Of Bitcoin
The first reaction of the free world to the War was the radical donation campaign they initiated across social media platforms. In few hours, millions of Dollars in Bitcoin have been donated to the Ukrainian people. In one donation, the anonymous philanthropist donated 80 Bitcoins valued at over $31 Million.
Exchanges were not left out as FTX credited $25 to every Ukrainian user registered with them. Binance also empowered the staffs in Kiev with the necessary resources and logistics to locate a safe haven for themselves and their immediate community. What does this mean for the Crypto space? More Exposure!!
Added Alternating Bitcoin Market Sentiment
Though this metric precedes the war, the war has also added it’s own distinct Fear and Greed, contributing to the already volatile Market sentiment of the Crypto Ecosystem. For instance, on the day of the Russian invasion of Ukraine, there was massive sell off due to heightened Fear among traders and investors.
This Fear could not be attributed to anything, and yet instead of the market plunging further as expected, we saw a rapid appreciation almost 3 Hours later. The appreciative correction continued even till the time of this publishing, and no one could tell the reason.
Rumors With Unpredictable Outcomes
Another sentiment that the Russia-Ukraine War have created in the Crypto Sphere is the unknown outcome of an assumed possible implementation of one or two of the trending rumors of the War.
What are these rumors? Following the imposition of strict Financial and Economic sanctions on Russia by US, EU and some UN member States for her invasion of Ukraine, analysts have struggled to arrive at an established conclusion on how these Sanctions would affect Bitcoin.
As earlier said, it takes more than the stakes of the warring nations in the Crypto Ecosystem to cause a significant price change; these sanctions, the counter-reaction from Russia, the possible resultant reaction from the free world, will all determine what direction the market will trend towards.
Some commentators have argued that should Russia be cut off from the Society For Worldwide Interbank Financial Telecommunication (SWIFT) which is responsible for processing worldwide Interbank financial transactions, then they may have to improvise to carrying out such International Banking Transactions through the Bitcoin Blockchain.
- Situation 1: What this means is obviously increased acceptance for Bitcoin, which will see more money flow into the Crypto ecosystem, resulting in spikes in asset value and entire Crypto ecosystem. Russia, a major economic giant, utilizing Bitcoin to power her International Transactions will surely bring in Billions of Dollars into the Crypto Sphere.
- Situation 2: Should situation 1 happen, analysts predicts that such a resolution from Russia will be met with severe and stricter penalties that will not only affect the engaging parties but will also cause a crackdown of stricter regulatory policies on Cryptocurrency. Such a situation as this, will surely cause massive panic in the Crypto Sphere. Such panic will surely lead to mass sell off.
So, with the Russia-Ukraine war having caused increase in funding charity through Crypto Donation, Heightened Volatile Sentiment and Rumors that have unpredictable result, How Will The Ukraine-Russia War Affect The Price Of Bitcoin?
How The Ukraine-Russia War Will Affect The Price Of Bitcoin
The Ukraine-Russia War will, just like any other circumstance, cause more exposure for Bitcoin, this exposure will result from the use of Bitcoin by the Crypto community to fund charity for the actual circumstance. This exposure will not affect the Fear or Greed Sentiment of holders, but rumors, news and the happenstances they come with will still have strong effect on the Market sentiment.
If the rumors come, there will be panics, when it happens in actuality, the market will trend towards the sentiment it came with. Market volatility will persist on both ends and whatever effect there will be, cannot be anything new to an already high volatile asset as Bitcoin.