Russia-Ukraine War: Is Cryptocurrency A Safe Haven?

Here are some facts that look at how cryptocurrencies fared during the biggest attack on a European country since World War II.

correlation puzzle

correlated or not? That’s a long-standing question for bitcoin, with the native cryptocurrency sometimes leading the way to equities beat – and other times not.

Bitcoin initially fell after Russia launched its attack on Ukraine as investors abandoned riskier assets, falling as much as 8% on Thursday, before hitting losses in the day. European shares fell 3.3% while the S&P 500 lost 1.5%.

The paths of bitcoin and stocks have reunited again, albeit to varying degrees.

Bitcoin jumped 14.5% on Monday, its best day in a year, and is now up 12% from the day before the attack began on February 24. US stocks have made small gains, with the S&P 500 up 3.3%. MSCI’s World Index is slightly lower.

Regarding bitcoin, Joseph Edwards, head of financial strategy at crypto firm Solarize Group, said, “It is still largely correlated with US equities during this crisis.”

a safe haven?

Crypto aficionados refer to bitcoin as “digital gold,” a handy place to deposit cash during a war or disaster. It is argued that bitcoin has a limited supply and runs on a global computer network beyond the reach of governments and is therefore more secure than traditional currencies.

Things are never that simple. Bitcoin’s safe-haven chops are ambiguous: it often behaves like a risk asset like a stock.

Investors say bitcoin’s characteristics have fueled demand during the war and helped it outperform other traditional havens. Gold is up 2.6% since last Wednesday while the US 10-year Treasury yield has fallen 8.7%.

Yet the move may do little to settle arguments over bitcoin’s safe-haven credentials, analysts said.

“We do not think BTC is, nor should be, viewed as a safe haven, but rather its appeal is that it is a supply-limited, credit-free, digital bearer asset that is an alternative to traditional finance in this current environment. is proving to be a viable option,” said Richard Usher at crypto firm BCB Group.

“If the situation continues to escalate and riskier markets are badly hit it will struggle to move forward, but will still outperform in our view.”

Ruble Routed, Bitcoin Bounce

Crypto trade in Russia has soared as the ruble was battered by Western sanctions aimed at squeezing Russia’s economy and isolating it from the global financial system.

The Russian currency hit an all-time low of 118.35 per dollar on Thursday.

According to researcher CryptoKitties, the trading volume between the ruble and the major cryptocurrencies reached 15.3 billion rubles ($140.7 million) on Monday, more than three times that of a week ago.

Data shows that ruble-denominated trading with Tether – a so-called stablecoin designed to maintain a stable price – reached 3.3 billion rubles on Monday, the highest this year and compared to a week earlier. Nearly five times more.

Statistics show that people in Russia are scrambling to keep their savings in cryptocurrencies a secret.

Noel Acheson, head of New York-based Market Insights, said the war contributed to the statement that bitcoin “is not just a speculative asset, it is also a seizure-resistant, policy-independent, long-term store of value.” Produce.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.