The price of Bitcoin has fallen yet again, this time down to $42,000in reaction to the crisis in Eastern Europe between Ukraine and Russia. This is coming exactly after a week of bitcoin rising to $45,000 after being down.
The digital currency seems more directly impacted by the geopolitical situation at the Ukraine-Russia border as troops and military machinery are built up in anticipation of a military showdown. A few other digital assets are also reacting to the political tension but at varying degrees.
The U.S and Others
There have been media reports making the rounds in the United States that say Russia might be actively strategizing to carry out an attack on Ukrainian soil for possibly Tuesday. Anthony Blinken, the American Secretary of State, stated that they are within a space where there can be an invasion at about any time.
Many countries, through their embassies, have requested their nationals and diplomatic staff to evacuate themselves from Ukraine with immediate effect. The U.S, the U.K, Denmark, and Finland are currently imploring citizens of their countries to exit Ukraine soonest as they provide evacuation support.
Financial Houses
The traditional centralized finance markets are also reeling from the effects of the political tension on them as the week draws to a close. Nasdaq fell and lost over 2% of its value while Dow Jones suffered a dip of 500 basis points in trading by Friday. This is possibly the reason bitcoin also sank beneath on Friday.
It has been observed in the last couple of months, by some chance, that bitcoin and some cryptocurrencies have had a corresponding movement with the stock and money markets to make it seem like they are pegged.
It is of very high importance to keep a close eye on what happens between Ukraine and Russia in the days ahead. It has the potential of having a significant effect on not just bitcoin but likewise on traditional stock and money markets across the globe. Besides, leading central banks around the world have been introducing interest rates hikes in their various economies as a result of high inflation and a means of curtailing it. Part of the causes of high global inflation is the relaxed monetary policy that has prevailed over some years.
More Possible Impacts of an Invasion
A Russian attack on Ukraine is what everyone fears might endanger the stability of Europe, and it may push the financial and crypto markets far lower. It is noteworthy that an invasion of Ukraine has a very high potential of spilling into other countries, with the Baltics being at the most immediate risk.
If by any chance traditional finance and Bitcoin fail, then altcoins would follow suit, even at a fast rate than other forms of a financial asset. Hence, a safe haven might not be a thing in periods of market turbulence.
Bitcoin currently trades at $$2,180 with a market capitalization of $800 billion after losing 3% of its value in 24 hours.