Bitcoin and ethereum dived by 8% and 9.7%, respectively, as the Russian invasion of Ukraine has sent equity markets in a spin. The cryptocurrency market has therefore lost $150 billion in the last 24 hours according to Coinmarketcap.
Bitcoin And Ethereum Fall
As reported by CNBC, bitcoin and ethereum —the world’s largest cryptocurrencies by market cap— have dived on the news of Russia’s military incursion in Ukraine. Bitcoin posted a new month-low of $34,702.18 earlier on Thursday, while ether traded around $2,372.63.
The news of the invasion sent European markets on a dive with Stoxx 600 dropping by 3.6% to a new year-low on Wednesday, “with banks plunging 6.8% to lead losses as all sector sand major bourses slid into negative territory.”
Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36, 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 risk off the table and stock markets globally are seeing major declines,” he added.
Given how closely the crypto markets have been correlated with risk assets over the past two months, experts say it is not a surprise that the situation is violently spreading into the crypto markets with bitcoin dropping more than 8% in a day.
Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, said, “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,” he adds.
“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.”
As the crisis unfolds, bitcoin could drop to the $30,000 mark, with the July lows of $28,000 and $29,000 as points of reference.