Bitcoin sign seen on a window in Toronto, May 8, 2014. REUTERS / Mark Blinch
I’m registering
March 1 – Bitcoin jumped after Russia’s invasion of Ukraine, backed by people in those countries who want to store and move money into anonymous and decentralized cryptocurrencies.
Russian ruble-denominated bitcoin trade increased when the invasion began on Thursday, with daily volumes up 259% from a day earlier to 1.3 billion rubles ($ 13.1 million), according to CryptoCompare.
Meanwhile, in Ukraine cryptocurrency exchange Kuna recorded its daily trading volume more than three times up to 150 million hryvnia ($ 5 million).
I’m registering
Bea O’Carroll, managing director of Radkl, a digital asset investment firm, said the war and Western sanctions have seen bitcoin tend to be used to transfer value.
“Basically, having a currency that is not controlled by the government, that is not affected by the emergency … is really interesting,” she added. “Maybe this is the way Russia is changing its value. Similarly, on the other hand, there was “so people will gain value for Ukrainians.”
In the five days since Russia invaded Ukraine on February 24, bitcoin has risen 13%, while the US stock index S&P 500, which it often mimics, has risen by about 2% and traditional gold for safe play is now high. degree equal to an increase of as much as 3.5% on the day of the invasion.
About $ 300 million short positions in bitcoin were liquidated on the day of the attack, according to Coinglass, while Singapore-based QCP Capital said a good portion of the long leverage positions had been withdrawn.
In addition to being largely anonymous, cryptocurrencies and transactions are often stored in portfolios on decentralized platforms that can be accessed from anywhere.
GET INTO THE OLIGARCHS
“Bitcoin could be a potentially safe haven for Russian oligarchs evading sanctions, as there will be no censorship of the bitcoin network and cryptocurrency transactions,” said Ipek Ozcardeskaya, a senior analyst at Swissquote Bank.
“Cryptocurrencies could act as a powerful means of storing value for many holdings, which should not be liquid.”
Still, for cryptocurrency fans, the fact that such holdings can offer a route around sanctions could be a double-edged sword.
“This could lead to NATO regulations against the use of cryptocurrency, but the other side is that there may be a wider acceptance of geopolitical shocks,” said Katie Talati, head of research at Arca’s digital asset manager.
Ukraine also quickly saw an opportunity in the scope and anonymity of the crypto world. Deputy Prime Minister Mikhail Fedorov tweeted the addresses of the bitcoin and ether portfolios, along with an appeal: “Stand with the people of Ukraine. You are now accepting donations of cryptocurrency.
Fedorov’s government and Ukrainian NGOs raised more than $ 22 million in cryptocurrencies after the appeals, according to blockchain analysis company Elliptic. Read more
Although bitcoin may emerge as a currency of choice in areas of geopolitical risk, however, market participants warn that there are differing views on whether it can more broadly become a “safe haven” asset, a form of digital gold.
For Zack Friedman, co-founder of the crypto brokerage company Secure Digital Markets, the profits of bitcoin after the invasion serve to impose the “story of the preservation of the value of bitcoin during turbulent times.”
STABLE BURNERS
Elsewhere, the money flows into “stable coins” that are pegged to traditional assets such as the US dollar.
According to CoinMarketCap, stablecoin transactions accounted for more than 83% of the total 24-hour cryptocurrency trading as of Friday.
USD Tether, the largest stablecoin, noted that its market capitalization climbed to an all-time high of nearly $ 80 billion, while gold-backed cryptocurrency PAX Gold added nearly $ 100 million to its market capitalization in two days.
($ 1 = 98.9450 rubles; $ 1 = 29.7000 hryvnias)
I’m registering
Report by Lisa Mattakkal and Medha Singh in Bengaluru, Alun John in Hong Kong and Vidya Ranganathan in Singapore; Edited by Vidya Ranganathan and Pravin Char
Our standards: ‘ principles of trust.