How Russia-Ukraine Conflict Could Impact the Crypto Market


Analysts say that in case of war in Ukraine, Bitcoin and altcoin markets, which are seen in the risky asset class, will make negative pricing. Here are the latest developments in the macro and crypto money markets.

Ukraine, which has a high agricultural production potential thanks to its wide agricultural areas, realizes 30% of the world corn production alone. The Eastern European country is a producer of many products from corn to wheat and is also on a strategically important route.

It is thought that Russian banks in the country will be closed after being threatened by the government. However, the economic and financial dimension of the event does not end here. It is stated that there may be a sale in Russian stocks, especially in banks.

In addition, the possibility of foreign investors leaving Ukraine remains on the agenda and puts pressure on stock markets. Countries around the world are asking their citizens to leave Ukraine, while French officials say Russia should be removed from Swift. Russia, on the other hand, considers blockchain technology powered by cryptocurrencies as an alternative to the Swift network.

The current Ukrainian government, which is trying to establish good relations with the Western world, receives serious support from the EU. Apart from debt payments to European banks, Russia is planned to be excluded from global trade.

As it will be remembered, in 2018, Russia announced that they were planning to create a Swift of their own with blockchain technology, but Putin has not been able to carry out a successful process by firing many coders like Pavel Durov in the last two decades.

Therefore, Russia has no alternative but to buy and hold Bitcoin or altcoins for now. However, Russia can probably still trade or continue global trade via cryptocurrency markets, as it has gold reserves. But that kind of trade would obviously be much more limited than Swift.

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Bitcoin, oil, and gas

Oil prices are expected to rise briefly, as they did in 2014 when Russia invaded Crimea. However, as before, it is thought that the problem will be solved shortly after Saudi Arabia increases its sales to the market. Experts report that a similar decrease can be seen in gas prices.

It is known that Qatar has recently held talks with the EU on gas. Analysts predict that if the crisis deepens, the price of Bitcoin will rise. The reason why this view is shared by many analysts is that the leading cryptocurrency is easily portable.

Considering that the outflow of cash from countries is prohibited, especially in cases such as war, the advantage offered by Bitcoin and altcoins will come to the fore. It is thought that there will be more entry into crypto markets in parallel with the increase in the fragility of weak economies.

Volatility may continue

The polarization between countries caused by the Ukraine-Russia tension and the uncertainty created by the FED's interest rate hike process hit the Bitcoin and altcoin markets the hardest on January 24. On January 24, Bitcoin dropped below $33,000.

Ethereum also dropped to $2,103. The two most valuable cryptocurrencies by market capitalization fell by nearly 50% from the ATH levels they achieved on November 10. The damage caused by this earthquake in cryptocurrencies seems to have recovered somewhat in the current situation. However, experts think that highly volatile movements in the crypto money markets will continue to be seen.

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