Following the Bitcoin surge, altcoins like Ethereum and Terra are registering impressive growth
Although the war between Russia and Ukraine is worsening, the geopolitical changes and the economic reliance has triggered the price of major cryptocurrencies including Bitcoin and Ethereum. Despite facing a bearish trend in February, the cryptocurrency market is showing signs of recovery in March. Since Monday, Bitcoin has gained almost 18% and neared the US$45k mark. Following the Bitcoin surge, altcoins like Ethereum and Terra are also registering impressive growth.
The worsening crisis between Russia and Ukraine has put the cryptocurrency market under security initially. But when the situation intensified, both the countries started using Bitcoin and altcoins as a tool. On one hand, Russia is evading US sanctions by using cryptocurrencies as a medium. Meanwhile, Ukraine on the other side has collected over US$36 million worth of cryptocurrency funds from people across the world to help its citizens with basic supplies. Owing to the increasing demand for Bitcoin, the whole cryptocurrency market is experiencing spikes. Ethereum has followed Bitcoin’s footsteps, seeing a price growth of 15%. Altcoins like Terra, Avalanche, Shiba Inu, and Polkadot are also registering massive growths in the past two days. However, there is uncertainty over how long this could last and how much cryptocurrencies will gain until the Russia-Ukraine conflict is resolved.
The US imposed strict sanctions targeting Russia’s central bank and some Western countries have also followed suit. Unfortunately, the Kremlin is taking ‘cryptocurrencies’ as the host at the time of crisis. Some state-owned companies and elite families are already investing in Bitcoin and altcoins to escape the embargo. Meanwhile, Ukraine is facilitating cryptocurrency crowdfunding. As per reports, the Ukrainian government and NGOs are using the collected Bitcoin and Ethereum funds to provide basic facilities to their citizens. However, the demand for cryptocurrencies didn’t go up solely based on these two countries’ usage. Amidst the ongoing war, analysts still say that the true value of Bitcoin will come out from an apolitical and trustful store of value that is borderless.
Why Bitcoin Now of All Times?
The growing geopolitical ruins have exposed the fault lines in the traditional financial system. Although it is good to some extent as Russia might not be able to make money movements across the world, they are getting a stronghold on the global economy through cryptocurrencies. Besides, Russia is trying its best to stop people from stepping off its financial circle. The Central Bank of Russia has raised interest rates to 20% to attract deposits and is preventing foreigners from selling securities.
Currently, Russia is positioned as the 18th country in cryptocurrency adoption. But the war tension could make people invest more in Bitcoin and Ethereum and help the country move towards the top positions. According to experts, Russia relying on cryptocurrencies is a pre-planned thing. Generally, the cryptocurrency market works in anticipation of an event. Similarly, the war was anticipated and the increasing adoption has caused high volatility.
Macro Changes is a Matter of Concern
With the traditional ecosystem failing to withstand, Bitcoin will fare well in a short timeframe. But experts warn that macro changes in the geopolitical situation and the financial market could put the cryptocurrency to test.
But Bitcoin’s Price Doesn’t Rely on Current Happenings
The whole motto of cryptocurrencies is to remain decentralized and not be shaken by geopolitical or economic happenings across the globe. Some analysts are also continuously pressing the point that even though Bitcoin’s value is high now due to the Russia-Ukraine war, the situation won’t stabilize its price. Then what exactly fixes bitcoin’s value?
- Its nature of existence and disconnect from the global happenings gives singularity to Bitcoin. Since it is not owned by a company or is regulated by a government, BTC has escaped every attempt at the ban over the past decade.
- Although people can view every transaction and verify them, nobody can hack, counterfeit, or change it. The security of Bitcoin is a major aspect that triggers its reliance.
- Unlike traditional financial assets, Bitcoin is borderless. All you need is an internet connection and a Bitcoin wallet to transfer funds from one country to another.
- The scarcity of Bitcoin and the growing demand is a matter of consideration. Already over 18 million out of the 21 million Bitcoins is in circulation. Therefore, the demand keeps growing as more people mine them.
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