The price of Bitcoin and all other major cryptocurrencies took a major tumble after Vladimir Putin invaded Ukraine.
The invasion began at roughly 3:59 local time (8:59 pm ET) today when Ukrainian guards were caught on live stream video reacting to something heading towards the border. Just under two hours later, Putin announced the “operation” to “protect people who have been subjected to abuse and genocide by the Kyiv (Kiev) regime for eight years".
Bitcoin immediately plunged from just under $37,000 to $35,000, before pulling back and staging a recovery. At the time of writing, the price is back to about $38,319, a similar level as before the invasion.
Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, told Gohkshtein Media that conflicts do not necessarily have a huge effect on the markets.
He said: "First of all, I would like to say that I am shocked by the attack on Ukraine. My thoughts go out to the residents and the Cryptohopper colleagues there. I find it unimaginable that this can still happen in 2022.
“I've been closely watching the markets for a while and was very curious how the Bitcoin price would react to this. I honestly think it's doing pretty ok. Regardless of the war, I expected a slight move down anyway, after which another $40k retest is expected. Whether this will still happen is, of course, the question.
“If you look at major historical events and how the stock markets react, there is not an extremely large action/reaction. For example, after the attack on Pearl Harbor, the markets "only" fell 3.8%. However, the run-up with the associated uncertainty seems to have a more significant impact.”
Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36, predicted that the conflict would steer investors away from risky assets, which could include crypto.
He said: “The prospect of geopolitical escalation has been the main driver of price moves in the broader risk asset spectrum for the past couple of weeks. Now that the war between Russia and Ukraine has become reality, investors are rushing to take risks off the table and stock markets globally are seeing major declines. Given how closely the crypto markets have been correlated with risk assets over the past two months, it doesn’t come as a surprise that the situation is aggressively spilling into the crypto markets with Bitcoin losing more than 8% in a day.
“It is tempting to think that Bitcoin and other crypto-assets may count on some relief from central banks in the form of a more dovish approach to rate hikes and quantitative tightening. The rationale behind it would be that the economy will now become too fragile to be taken off central banks’ support just yet.
“However, the current geopolitical situation will inevitably have an effect on the already elevated prices in the commodities market and aggravate the already-serious supply chain issues which, in turn, could elevate inflation. This means that the Fed and other central banks may really have no room to reverse their hawkish course and we can expect risk assets and cryptocurrencies to go deeper into the bear market territory.”
Incidentally, a sweary “High-Performance Executive Business Success Coach” called Dan Pena has previously discussed the possibility that Putin created Bitcoin as part of a “conspiracy to f*** up the American economy” and “see the demise of the Western financial world”.
Pena calls himself The Trillion Dollar man and is a successful businessman who now enjoys a second career in which he shouts swearwords at a class full of students and discusses “controversial issues punctuated with expressive, rough, and often distasteful words and remarks”.
Fortunately, there is no evidence we know of that suggests Satoshi Nakamoto was actually Vladimir Putin, so that’s just a conspiracy theory at this stage.
Expect to hear a lot more of them in the coming weeks, with the Russian troll army likely to continue spreading disinformation online as Moscow’s actual troops march through Ukraine IRL. Please don’t believe everything you read on the internet…
