Bitcoin Plummets as Ukraine-Russia Tension Builds

Paigambar Mohan Raj
Source: Ukraine EPA

As tensions between Russia and Ukraine near a breaking point, Bitcoin and cryptocurrency prices have plummeted. 

The drop in Bitcoin and cryptocurrency prices coincides with a stock market sell-off caused by US Vice President Joe Biden’s remarks that Russia could invade Ukraine in a matter of days. 

Bitcoin’s price has dropped almost 10% in the previous 24 hours, plummeting toward $40,000, while ethereum, BNB, Solana, Cardano, and XRP have all seen similar drops, wiping nearly $200 billion from the total $1.9 trillion crypto market in the last week.

“There’s a storm blowing in and markets have been battering down the hatches….volatility is unlikely to vanish anytime soon.”

AJ Bell finance analyst, Danni Hewson.

​​The Bitcoin and cryptocurrency markets had been showing signs of recovery until the recent sell-off, after plunging last month. Last week, the bitcoin price surpassed $45,000 per bitcoin, with Ethereum and other top 10 coins such as BNB, Solana, Cardano, and XRP exhibiting similar gains.

Sam Kopelman, U.K. manager at crypto exchange Luno, said,

“Despite briefly visiting the greed territory for the first time in four months last Wednesday, market sentiment has since slipped back into the fear territory as geopolitical uncertainty affects risk sentiment in the broader financial markets.”

“Meanwhile, with inflation levels at their highest rates in 30 years, it is likely that macro uncertainty will also affect risk sentiment in the coming weeks.”

Uncertainty along Ukraine-Russia border

Traders and investors are growing increasingly concerned about the Russian-Ukraine conflict. Oil prices have risen sharply, approaching $100 a barrel, and the VIX, a measure of market volatility, jumped over 15% on Thursday. Meanwhile, the Financial Stability Board’s chair has cautioned that placing sanctions on Russia might jeopardize global financial stability. 

While Russia claims to be pulling soldiers away from the Ukrainian border, President Biden said Russia is planning to invent a justification to invade the country, warning that an attack may occur within days.

Biden informed reporters outside the White House,

“We have reason to believe they are engaged in a false flag operation to have an excuse to go in,”

Ukraine has only yesterday legalized Bitcoin and other cryptocurrencies in an amended bill, passed with a majority voting in favor.

At the time of publication, BTC was trading at $40,691.81, down 6.8% from yesterday.