The impact of the Russia-Ukrainian war on the cryptocurrency industry
The beginning of war in Ukraine’s Donbas region has resulted in unprecedented fluctuations in the cryptocurrency market. On 24, February, Bitcoin slid 8.5% to $34,337 after Russia declared war on Ukraine. In turn, Ethereum dropped 12% to $2,300. Experts explain this as ambiguity, which is usually dreaded by financial markets. The day before Russia declared war on Ukraine, the cryptocurrency price went from 39,100 to 34,600 USD. Furthermore, the crypto-sector capitalization has dropped by more than $350 million. We noticed that many people decided to invest in various cryptocurrencies such as BTC, ETH, and others that pushed the BTC market back to 44,600 USD at the time of writing this article. We may think that the cryptocurrencies may be considered as a safe haven for people fearing inflation and stock market decrease.
The Ukrainian government and non-profit organizations amassed more than $19 million in cryptocurrencies as the help in the war with Russia. According to Elliptic, the donations digital assets include Bitcoin, Ethereum, and Tether. Also, experts consider crypto-assets to be a vital form of crowdfunding during the Russian military invasion since they enable transactions to be completed rapidly and without the constraints imposed by regular banking institutions. Nearly 56% of the $18.9 million in donations are for Bitcoin, 32 % for Ethereum, and 11% for other cryptocurrencies (including stablecoins, such as Tether, USD Coin, Dai, etc). On February 28, the 115.3 BTC and at least 1961 ETH had been gathered.
Russia’s military invasion of Ukraine has impacted global markets, including the cryptocurrency industry. However, the surge of asset sales is lost, and the exchange rate of key virtual assets falls too. This was the conclusion reached by analysts at the worldwide Grayscale Investments after studying the factors influencing the price of crypto-assets. Thus, the analysts say there is a great connection of the Bitcoin rate with the S&M 500 and PCT stock indexes at the beginning of 2022. According to reports, the recent surge in risky assets has been halted by news of Ukraine’s preparations for war.
Large market players predict that further Russian auctions may result in a decline in the currency rate. On the other hand, the quotes have already found their bottom since the market is already falling in anticipation of further Russian Federation military actions. At the same time, Grayscale experts believe that if the rates continue to decrease in the coming days or weeks, the sellers’ momentum will worsen. However, in addition to the geopolitical scenario, the impact on the crypto industry may be triggered by an increase in interest rates by the United States Federal Reserve.
We have to mention that the Ukrainian government legally collects donations in Bitcoin, Ether, and Tether. The wallet addresses were published on the country’s official Twitter account, as well as the Minister of Digital Transformation Mykhailo Fedorov. Vitalik Buterin, creator of the Ethereum cryptocurrency, and Justin Sun, author of the Tron crypto-project, both voiced fear that Twitter accounts may be stolen. However, the Ukrainian mission to the World Trade Organization (WTO) stated that the authorities do accept cryptocurrency donations. Furthermore, everyone may join the campaign and help to halt Russia’s large-scale invasion of independent Ukraine. Mykhailo Fedorov, Minister of Digital Transformation, announced the crypto wallet for Bitcoin, Ethereum, and Tether to raise funds to fight the aggressor. The collected cryptocurrency will go to support the National Police, the National Guard, the State Border Guard Service, and the State Emergency Service of Ukraine:
BTC — 357a3So9CbsNfBBgFYACGvxxS6tMaDoa1P
ETH — 0x165CD37b4C644C2921454429E7F9358d18A45e14
USDT (trc20) — TEFccmfQ38cZS1DTZVhsxKVDckA8Y6VfCy
Valentyna Bereza, Team bit4you.