Crypto Market in Freefall as Russia Invades Ukraine

Over $200 billion in value has been wiped out of the crypto market after Russia launched a full-blown military attack on Ukraine earlier this morning. The two biggest cryptocurrencies, Bitcoin and Ethereum, are down 10% and 13.6% at press time.

Crypto Market Plummets on Russian Military Attack 

Global markets are feeling the effects of Russia’s military attack on Ukraine—and crypto assets have been particularly hard hit. 

The crypto market has dipped around 11% and lost over $200 billion in value in the last 24 hours. While physical gold has soared over 2.22% to its highest price in over a year, Bitcoin—often dubbed “digital gold” in crypto circles—has plunged 10% today, trading just above $35,000. 

Earlier this morning, Russian President Vladimir Putin authorized and announced a “special military operation” against Ukraine. Explosions in multiple cities across the country were reportedly heard within minutes of the broadcast. In response, Ukrainian President Volodymyr Zelenskyy has declared martial law and called on all citizens to defend the country, saying Kyiv would issue weapons to everyone who wanted them. Ukraine’s military has said that over 50 Russian soliders have been killed and six warplanes destroyed so far. Thousands of Ukrainian citizens are already feeling the country.

The latest price action bodes poorly for Bitcoin’s “safe haven” narrative as investors have started offloading their holdings to seek refuge from the turbulence caused by the invasion. Other cryptocurrencies haven’t fared any better. The second largest cryptocurrency, Ethereum, is down 13.6%, while plenty of lower cap coins, including recent gainers like Kadena and Fantom, are down even further. 

Like the crypto market, stocks have also plunged significantly today across the board. Russian shares were hit the hardest—and by a wide margin. Moscow’s biggest index fund, the IMOEX, marked its biggest daily drop in history—falling 45% before recouping some of its losses. It is currently trading 30% down on the day. The American S&P500, meanwhile, has dipped around 1.8%. 

The crypto market has been trading downwards or sideways for the last four months, with the latest geopolitical and macroeconomic developments only worsening its prospects. Bitcoin and Ethereum are both down around 50% from their all-time highs made in November, while lower cap crypto assets such as alternative Layer 1 and DeFi coins, have mostly erased 70% to 90% of their gains over the same period.

The global cryptocurrency market cap is currently about $1.6 trillion. It’s almost 50% down from its $3 trillion high recorded in November.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.