The war between Russia and Ukraine aggravates the fall of bitcoin: it is already worth half that in November 2021

The price of gas skyrockets in the European Union; stock indices are plummeting across the continent (including Russia)… there are many ways in which the military conflict between Russia and Ukraine is impacting the economy. And, of course, the cryptocurrency market is also being affected by this situation.

The price of bitcoin had already fallen below $40,000 last weekend, and has continued to fall as geopolitical tensions between Russia and NATO have grown. This morning, after the Russian invasion of Ukrainian territory, it has definitively fallen below 35,000 dollars.

In total, since its November 2021 high ($68,990), Bitcoin has lost almost half its value. And if the military confrontations in the area are prolonged, it is not ruled out that the psychological barrier of 30,000 dollars can be overcome (below).

But this fall does not only affect the currency created by Satoshi: the other ‘cryptos’ with weight in the market, such as ethereum and dogecoin, have also fallen during the first hours of today by 12 % and 17%, respectively.

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The situation of cryptocurrencies in Russia and Ukraine

A month ago we told you the five reasons why bitcoin had fallen 17% since the beginning of this year. And not only was one of those reasons literally the “imminent armed conflict in Eastern Europe“, but another of them was the proposal of the Central Bank of Russia to ban cryptocurrencies.

This last threat seems to have dissipated now: the Russian government talked a few days ago of regulating (“strictly”) and taxing cryptocurrencies, but not of banning them. It does not suit him, given that 12% of all of them are in the hands of Russian citizens and companies… and that now they stand as the best tool to avoid the economic sanctions of the United States and the European Union.

Twitter has been blocking accounts reporting on the Russian attack on Ukraine citing “human error”

And it is that, if the traditional money that moves between financial institutions can be easily tracked and frozen by governments, that Russian institutions and companies resort to bitcoin, ethereum and other ‘crypto’ can be key to continue to transact under the noses of Western governments.

Interestingly, the Verkhovna Rada of Ukraine had approved its own Law on Virtual Assets just a week ago, with the explicit goal of positioning itself globally as an attractive destination for investors in cryptocurrencies. And thus achieve, hopefully, erode that 12% of Russia’s ‘crypto reserves’. Now, unfortunately, the competition between both nations has moved to a much more tangible field.