While Russia and Ukraine are currently on peace talks, the possibility of war or peace between these two nations is largely uncertain. This uncertainty has adversely affected the financial market and the crypto market. Analysts and observers believe that the downward pull of the crypto market’s value over the weekend is a result of the preparedness of war going on around the Russian-Ukraine borders.
The crypto market cap value experienced a downturn to below $2million; Bitcoin slumped to the range of $42K a notable $4.11% decrease, while altcoins, Ethereum, went back to below $3K (4.76% decrease), Avalanche 5% and Solana 2%.
Though multiple economic factors can affect the rise and fall of the financial market, the negative impact of the Russian-Ukraine crisis on the crypto market has been slightly felt as there was a downturn in the price of bitcoin and the Layer 1 coins.
According to the Co-founder of Mudrex, Edul Patel, what we experienced may be due to the volatile nature of the market as of present. The unstable federal reserves also necessitate a slippery market situation. However, the Russian-Ukraine crisis can also be a factor that could generate erratic market moves.
A Dramatic Turn of Events
Sequel to the crisis, Russia has deployed over 100,000 troops and sophisticated military wares along the Ukraine borders. However, on Tuesday, Russia’s defense ministry’s spokesperson, Maj. Gen. Igor Konashenkov announced an end to military actions around the borders. Troops who have completed their tasks are packing up their equipment and requirements and gradually moving back to their military base on the Russian side. Only a combined military exercise will continue.
Following the announcement by Russia’s defense ministry’s spokesperson above, cryptocurrencies have rallied towards support. As of the time of writing, bitcoin price is $44,406.34 (4.34%+), Ethereum $3,135.32 (6.74%+), Solana $102.58 ($6.11%+), Avalanche $89.03 (9.27%+), while the crypto market cap has surged above $2trillion.
In the Possibility of War
If the possibility of war between Russia and Ukraine becomes a reality, the value of cryptocurrencies is likely to pull downwards. In his remarks, Glen Goodman observes that historically, stock markets tend to pull downwards with the spark of conflicts among nations of the West. The Crypto market may not be an exception as it is bound to tilt towards the downward pull of the general stock markets. However, these bearish impacts do not last long.
That notwithstanding, the crypto market is back. It is staging a vast rebound to stability and recovery following the news of a lesser tension and reduced Russian military activities along the Russia-Ukraine borders. Although both NATO, UK, and Ukraine officials have expressed doubt on the reality of Russian troops’ withdrawal along its borders, the news has had a credible and substantial positive effect on the value of the crypto markets.
In line with the Ukraine Foreign Minister’s belief, we will believe in a possible de-escalation until we see Russia’s withdrawal. As uncertainties fog the coming week, we hope for a total de-escalation of the crisis and a complete withdrawal of Russian military troops along its shared borders with Ukraine.