The Russia / Ukraine war plunges the price of Bitcoin and cryptocurrencies

Russia has just declared war on Ukraine. The attack by Russian troops caused a sharp collapse in the financial markets. Bitcoin and cryptocurrencies are no exception. The queen of crypto-assets fell around $35,000, dragging all altcoins in its wake.

This Thursday, February 24, 2022, Vladimir PoutinePresident of Russia, announced “a special military operation” in Ukraine. Despite attempts at conciliation by Emmanuel Macron, President of France, and Joe Biden, leader of the United States, the Russian President has carried out his threats.

After Putin pledged to “demilitarize and denazify Ukraine”, Russian forces entered Ukrainian territory. Several cities were quickly bombarded by the Russian army, including the capital Kiev and Odessa. As several Ukrainian planes were shot down and Russian tanks crossed the border, the American president promptly denounced a “unwarranted attack”. Most European leaders agreed.

Read also: The price of Bitcoin would not go up before 2024, here is why

Financial markets collapse after Russian invasion of Ukraine

The invasion of Ukraine caused a sudden collapse of the financial markets. Asian stock markets opened in the red while Russian stock markets preferred to suspend trading after Putin’s speech. the CAC 40 fell more than 4% on opening. Most of the companies listed on the stock exchange recorded a drop in their share price. The VIX, the US financial market volatility indicator dubbed the “fear index”, soared.

bitcoin course

The cryptocurrency market also crashed on reactions to Russian strikes in Ukraine. The price of Bitcoin briefly fell under $35,000, after weeks of hovering around $40,000. The oldest digital currency lost more than 10% of its value in a few hours.

Under these uncertain conditions, investors are withdrawing their holdings from the riskiest assets, such as cryptos. If Bitcoin is regularly presented as a safe haven against the vagaries of finance, the massive influx of institutional investors has helped to increase its correlation to stock markets.

As always, the queen of cryptocurrencies has dragged all altcoins down with it. Ether stabilized around $2300, down more than 10%. The total market capitalization of the digital currency market has contracted by 10% in the space of 24 hours, according to data from CoinMarketCap. The market is now valued below $1.6 billion.

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