Topline
The value of top cryptocurrency tokens—including market leaders bitcoin and ether—soared on Tuesday, the sixth day of Russia’s invasion in Ukraine, reversing steep declines from the start of the war amid expectations Russia could use the assets to evade Western sanctions.
Bitcoin has rebounded after initially dropping when Russia invaded Ukraine.
Key Facts
Bitcoin, the world’s largest digital coin by market capitalization, jumped nearly 13% to more than $43,100 on Tuesday morning, compared to the previous 24 hours.
Ether, the world’s second-largest cryptocurrency by market capitalization, rose by more than 9% to nearly $2,900 over the same time period.
Other major cryptocurrencies—including Binance’s BNB, Solana’s sol, Cardano’s ada and Ripple’s XRP—witnessed similar bumps between 5% and 10%, with Terra’s luna jumping by more than 20%.
The gains reflect a wider rally in the cryptocurrency market, which grew by 10% in the last 24 hours and is now worth nearly $2 trillion, according to CoinGecko.
Key Background
Russia’s invasion of Ukraine triggered a barrage of tough economic sanctions from world governments which have isolated Russia from the global financial system, hobbled its economy and sent its currency, the ruble, plummeting to record lows. Crypto trading, notably bitcoin, in both rubles and Ukraine’s hryvnia has spiked during the conflict, Bloomberg reports, citing crypto data firm Kaiko. It’s unclear why interest has spiked, though reasons could include the volatility of both fiat currencies and cryptocurrency being used to donate to the Ukrainian effort, as well as Russia attempting to use crypto to evade sanctions. With more Russians possibly moving their money into cryptocurrencies, Ukrainian officials have called on exchanges to block Russian users and freeze assets linked to Russian and Belarusian people.
Surprising Fact
Bitcoin is now worth more than the Russian ruble. The surge in bitcoin’s value has coincided with the tumbling value of Russia’s ruble following stinging sanctions punishing the Russian economy. According to data from CoinMarketCap, the market capitalization of bitcoin (around $821 billion) now exceeds the supply of the Russian ruble (65.3 trillion rubles as of February 1, approximately $638 billion at the time of writing).
Further Reading
Bitcoin Volume Spikes in Russia and Ukraine as Sanctions Hit (Bloomberg)
Russia’s hidden tool to undermine sanctions (Politico)
Ukraine Receives $4 Million In Crypto Donations Within Hours—Including $1.9 Million Tied To Pak, Julian Assange NFT Collection (Forbes)
Russia May Use Cryptocurrency To Try And Evade Sanctions—But Here’s Why That Will Be Hard (Forbes)
Source: https://www.forbes.com/sites/roberthart/2022/03/01/major-cryptocurrencies-including-bitcoin-ether-rise-amid-fears-russia-will-evade-sanctions-with-crypto/