The crypto economy lost more than 11 percent in value versus the US dollar during the early morning trading sessions on Thursday (EST), according to 24-hour statistics. While the most valuable crypto asset, bitcoin, lost close to 10% of its value, a slew of other digital assets lost close to 20%. The crypto market collapse is being blamed on Russia invading Ukraine’s borders before daybreak on February 24, when Russian President Vladimir Putin’s army entered the country. The digital currency community has been debating the situation, and many crypto supporters have differing viewpoints on the current geopolitical risk and its implications for the crypto economy in the future.
The Crypto-Economy Loses 11% as Russian Troops Invade Ukraine Bitcoin Proponents Discuss Geopolitical Risk Overnight
Russian military have invaded Ukraine, according to numerous media reports, and war crimes have been committed. While the exact scope of the attack is unknown, sources suggest cruise missiles were fired and a few explosions occurred near Kyiv’s international airport.
The global tension has prompted financial markets and cryptocurrencies to plummet in value, as our newsdesk reported yesterday. At the time of writing, the entire crypto-economy has dropped 11.1 percent, and futures predict that Wall Street equities will have a tumultuous day of trading on Thursday.
What happens with bitcoin and crypto during war. Guess we will find out. Yay history.
— DaBean (@HoneyBadger10) February 24, 2022
Meanwhile, cryptocurrency supporters are debating the situation in Russia and Ukraine in great detail, as well as speculations about the future of crypto markets in the midst of the escalating crisis.
“If you’re selling bitcoin here because of fears of war and social turmoil, you have absolutely no idea what you possess and why it is so vitally necessary for the world at this very moment,” James Lavish, a “reformed hedge-fund manager” and bitcoin proponent, warned his 18,000 Twitter followers.
Samuel Bankman-Fried, the CEO of FTX, also addressed the situation in Ukraine, emphasizing that conflict is “very awful for the world.” Eastern European financial systems and currencies were also experiencing the brunt of the storm, according to Bankman-Fried.
“It’s understandable that equities are down,” stated the FTX CEO. “War is, in general, a negative thing. What is BTC’s role in this situation? — People have less free cash as the world gets crazier. Basically, selling BTC — as well as stocks and other assets — to pay for war.”
The FTX executive went on to say:
On the other hand, Eastern European currencies are likely to be destabilized as a result of this. And, more broadly, for the financial systems of Eastern Europe. It’s possible they’re seeking for alternatives. Where would you put your money if you were in Ukraine right now?
Despite the market turmoil, many crypto advocates continued to emphasize the importance of censorship-resistant cryptocurrencies in times like these.
On Twitter, someone commented, “There’s a war going on outside.” “I’m tempted to declare ‘crypto is irrelevant today.’ But that’s nonsense. The endless battles will continue as long as the globe is powered by the old money printing engine. The adoption of bitcoin and blockchain technology will divorce nation-states from banks.”
Get out of the war dollar.
purchase #Bitcoin
Alex McShane (@mcshane writes) (@mcshane writes) (@mcshane writes) (@mcs 24 February 2022
Another user tweeted, “It’s not World War III, but it’s the greatest moment to go into bitcoin.” “Give bitcoin a chance,” stated Microstrategy CEO Michael Saylor, replacing the old adage “give peace a chance” with the term bitcoin.
Others, such Peter Schiff, believe the Fed will change its tune.
Naturally, gold bug and economist Peter Schiff chimed in with his thoughts on the Russian invasion, the Federal Reserve, gold, and bitcoin.
“Perhaps the Fed is relieved that Russia invaded Ukraine because it now has an excuse not to hike interest rates in March,” Schiff speculated on Twitter. “It would’ve been something different if it hadn’t been this, but as far as excuses go, this one is hard to beat.” The news sent gold up 1.5 percent and cryptocurrency down 5.5 percent.” Schiff is convinced that imposing sanctions on Russia will result in even worse inflation for Americans. Others agree with Schiff and believe the Fed will refuse to embrace fiscal responsibility in the aftermath of the Russian invasion.
On social media, one crypto supporter insisted:
During a conflict, inflation worsens rather than improves. Any attempts by the Fed to be fiscally responsible, in my opinion, will be futile. #Bitcoin.
The Federal Reserve is the topic of discussion because of the expected rate hike in March. While the Federal Open Market Committee (FOMC) warned the press that the benchmark interest rate will be raised “soon,” Fed chair Jerome Powell told reporters that it would most likely happen at the March FOMC meeting.
Fiat is war. #Bitcoin is peace pic.twitter.com/qSQzglteMe
— Bitcoin Meme Hub 🔞 (@BitcoinMemeHub) February 24, 2022
If the Federal Reserve raises the bank rate, equity and cryptocurrency markets may experience more sell-offs. Although, as Schiff and others have noted, the Ukraine crisis may prevent the Fed from hiking the bank rate and delaying the reduction of large-scale monetary purchases.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
