Geopolitical tension over Ukraine has roiled global markets, but digital currencies took a worse beating than most other assets on Tuesday.
Bitcoin is currently down by 3% to $37,495. The world’s biggest cryptocurrency today sank as low as $36,370 during morning trade and has not yet pared its losses today – though it did manage some minor recovery early this afternoon after hitting two weeks low.
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With the price of BTC continuing its downward trend, other digital assets are also falling. For example, ether’s value dropped 4%, and XRP sank 10%.
The drop in prices is attributed to the Russia-Ukraine crisis, as President Vladimir Putin ordered troops into two breakaway regions on Monday. Moments after declaring them as independent entities within Ukraine’s borders (and moments before announcing this), he sent out an all-clear signal that his country would not back down without a fight.
With fears of an invasion sweeping the globe, global stocks sharply declined late Wednesday. The move has fueled these worries and sent investors running for safety.
In an interview with CNBC, Chris Dick from B2C2 told;
Bitcoin, and crypto more generally, moved in lock step with Asian stock indices overnight as Russian-Ukraine headlines drove price movements. First a sell-off as Putin announced he was ordering troops into Ukraine and then a bounce back as the market processed the headlines.
Bitcoin As Digital Gold
It’s often said that BTC is a safe haven for those in times of uncertainty, like gold. This means it can provide them with security and peace of mind as they wait out these difficult periods from world markets.
The idea that Bitcoin is a sort of “digital gold” has been broken down by institutional investors and it’s becoming more closely aligned with fluctuations in traditional markets.
Bitcoin hit a new all-time high of $68,000 in November, but it’s now well below that. Nevertheless, some investors are convinced we’ve seen as good as we’re going to get for bitcoin for some time.
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When asked about the future of bitcoin, Du Jun, Huobi’s co-founder, said that it is likely to remain stagnant for another two years. However, the co-founder claims this upcoming halving event could cause a new bull market in 2024 if things go right regarding prices and regulations across various countries. The world currently regulates cryptocurrencies and those who may want them to but don’t yet allow them fully within their borders or even simply forbid trading altogether without specific laws being put into place.
Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome next bull market on bitcoin.
The coming bitcoin halving is expected to reduce the rewards miners of this cryptocurrency get for verifying transactions, effectively squeezing new coins in issuance.
Featured image from Pixabay and Chart from TradingView.com