Crypto Market Affected Due To Russia vs Ukraine Crisis; Prices Of Bitcoin, Shiba Inu Dips
The bitcoin market plummeted when Russia launched a “special military operation” against Ukraine. Bitcoin’s price has dropped 8.12% in the previous 24 hours, while Ethereum’s price has dropped 13.28%.
The war between Russia and Ukraine has had an impact on the crypto currency market, with the global crypto market value falling to $1.57 trillion, a loss of over 9.66 percent in the last 24 hours. Russia is suspected of using crypto money to mitigate the impact of sanctions by avoiding checkpoints. It may also strike arrangements with anyone working with them via digital currency anywhere in the world, according to Business Today.
Between November of last year and January of this year, the cryptocurrency markets essentially imploded. Several of the most valuable cryptocurrencies, as measured by market capitalization, have dropped by more than 50%.
As many digital tokens recovered at the start of this month, it appeared that the worst was past. The rebound, however, came to a standstill due to geopolitical concerns. Here’s why the crisis between Russia and Ukraine could result in another Bitcoin crash.
The Risks Involved
At first look, the situation in Russia and Ukraine may appear to have nothing to do with cryptocurrency. After all, even if the war develops, most digital tokens would be unaffected.
When the entire environment appears to be too risky, however, many investors prefer to put their money into assets that provide greater stability and protection. The “risk-off” trade is a term used to describe this strategy.
Even before the increase of tensions between Russia and Ukraine, a risk-off scenario began to unfold in late 2021. It’s why, in recent months, both growth stocks and cryptocurrencies have plummeted.
However, the threat of a disagreement that goes beyond words is likely to make investors nervous. The probable consequences of economic sanctions, as well as rising global tension, will not improve matters.
The Impact is at Varying Levels
In a full-fledged risk-off market, not every cryptocurrency will bring the same level of anguish for investors. The most well-known and commonly utilized cryptocurrencies, for example, are unlikely to decrease as much as others.
Many digital tokens would likely hold up better than Bitcoin (BTC 0.87 percent) and Ether (ETH 1.31 percent). They are the two most valuable cryptocurrencies in terms of market capitalization. With Ethereum’s blockchain used widely to support smart contracts, its real-world utility could provide a cushion to some extent.
The most popular meme coins such as Shiba Inu ( SHIB -0.25 percent ) probably wouldn’t fare as well as Bitcoin and Ether would. However, less well-known meme coins could get hit even harder.
Take Home From Past Events
Investors may learn a lot from risk-averse environments in the past. For starters, they don’t last indefinitely. They can also give fantastic buying opportunities for assets that are expected to do well in the future.
Different investors will almost certainly hold wildly divergent views on which cryptocurrencies are most likely to recover the fastest once the crisis has passed. However, it might be argued that cryptocurrencies with catalysts on the way are in the strongest position.