Russia’s probable invasion of its neighboring country, Ukraine, has reached the cryptocurrency market as decentralized assets’ valuation crashed with escalated tensions, resulting in cryptocurrency investors offloading their assets to safeguard their portfolios before any risky price fall.
On Friday, U.S. President Joe Biden revealed that Russia’s President Vladimir Putin decided to take control of Ukraine, adding that a probable military strike is bound to happen in the upcoming days.
During the weekend, various news agencies reported multiple strikes in the eastern Ukrainian city, Donetsk, increasing worries for cryptocurrency investors as the market appears to be on what could be a detrimental crash, associated with rising conflict between both countries.
As of 5 pm India time, the godfather of all cryptocurrencies, Bitcoin, fell 4 percent in the previous 24 hours, after trading at $38,265 on Coinbase, reaching a 9.6 percent lower valuation over the past seven days.
Bitcoin, however, was not the only asset affected by the escalating geopolitical tensions. Ethereum fell by 3.6 percent, Binance Coin by 4.2 percent, Avalanche by 4.25 percent, Terra by 3.31 percent, and Cardano dropped by 3.85 percent.
At the same time, the metaverse tokens’ value also witnessed a drop in value, with Decentraland and The Sand Box both falling by 5.7 percent and 5.3 percent. As for Shiba Inu, the famous meme coin lost over 7 percent of its valuation, and Elon Musk’s deary coin also slid by 2.3 percent.
“The current dip in the crypto market can be seen as a knee-jerk reaction to the growing tension between Ukraine and Russia,” said Shivam Tharkal, BuyUcoin CEO.
“If there was a war between the two biggest crypto hubs in the world, it could shoot up the Bitcoin hash rate, and this fear is keeping the crypto market on its toes. If we look at the overall picture, we have seen some promising developments recently, like the crypto-focused Super Bowl and NYSE [New York Stock Exchange] filling a trademark to become a financial exchange for NFT [Non-Fungible Tokens] and crypto trading,” Tharkal added.
In the past few weeks, Bitcoin managed to pull itself up prior to the intensified uneasiness between Russia and Ukraine, hitting a margin of $45,855 on February 10.
Due to the soaring escalations, Indian investors have expressed their uneasiness concerning the heavy price fluctuation in the past two months. In addition to the heavy losses in the cryptocurrency market, governmental regulatory vagueness regarding the legal status of cryptocurrency and increased tax rate on decentralized assets also intensified investors’ worries.
“In the last two months, they have been in the red,” a Noida-based crypto investor and commentator, Vishal Gupta, addressed the market drop in India.
“It has been one factor after another that’s hit the cryptocurrency market. People are not used to dealing with a prolonged period of uncertainty. Most small investors are now saying that once they recoup their investments, they are getting out of the market, but then crypto is addictive.”