- Regular people are being pushed into crypto by crypto bulls.
- It could be the start of ‘accelerating the de-dollarization’ of the global economy.
According to billionaire Mike Novogratz, a long-time crypto bull, Russia’s invasion of Ukraine could cause more people to abandon the dollar, thereby boosting cryptocurrencies and local fiat.
The rapid increase in Bitcoin trading utilizing the Russian ruble and Ukrainian hryvnia has supported proponents’ claims that a decentralized currency can provide a safe haven when traditional banking is unavailable. The invasion and sanctions against Russia may encourage more ordinary people to embrace cryptocurrency, according to Novogratz, though he clarified that this does not suggest that Bitcoin is being used to circumvent sanctions.
In an interview, the founder of Galaxy Digital Holdings said, “We’ve never seen a collection of nations in essence confiscate real estate from Russian tycoons.” “This sends a message: I want money that isn’t tied to established power structures.” People don’t trust governments, which is why Bitcoin was developed.” Blockchain ledgers, on the other hand, are completely transparent.
In the last two days, the world’s largest cryptocurrency has decoupled from risk-on assets, bolstering arguments that the coin may be used as a store of value that is uncorrelated to the broader market. Bitcoin’s correlation with the S&P 500 is still high at 0.55, although it has dropped from a peak of 0.7 earlier this year.
Sanctions against Russian banks, companies, and affluent elites, as well as the resulting economic damage, have been blamed by some analysts for encouraging a rush towards digital assets. There are lessons to be learnt in relying on the US dollar for spectators like China, according to Novogratz.
“I’ll tell you one thing: before you invade Taiwan, you’re going to sell your reserves,” he said. “In a lot of respects, this is a significant thing. This marks the beginning of the world’s de-dollarization.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
