Crypto markets plummet as Russia-Ukraine tensions grow

Bitcoin has been tumbling for the better part of this week, with the coin testing lows of around $36,000. Bitcoin (BTC/USD) is not the only asset trembling, as recessions have been experienced across all financial markets, including stocks, due to the looming invasion of Ukraine by Russia.

Bitcoin tumbles amid Russia tensions

On Monday, the President of the Russian Federation, Vladimir Putin, ordered Russian troops to move into separatist pro-Moscow regions in eastern Ukraine. This action has intensified fears of a full-blown invasion into Ukraine, and the situation is reeling global markets.

CNBC’s MacKenzie Sigalos noted that the Stocks and crypto markets are trading lower as investors lose their appetite for risky financial investments. Bitcoin has lost nearly half of its value after hitting its all-time high of $69,000 in November 2021. The plummeting value has created skepticism of the use of Bitcoin as a hedge against inflation.

The primary cryptocurrency has received the term digital gold, with pro-Bitcoin supporters arguing that it can be used as a hedge against inflation and can be used as a “safe haven” during times of market uncertainty.

The argument has been weakened by the growing correlation between the stock market and the cryptocurrency market. The growing institutional adoption of Bitcoin and other cryptocurrencies has resulted in the stock and crypto markets behaving in a nearly similar manner.

Crypto markets recover slightly

On Tuesday, the crypto market started showing signs of a recovery after the US, UK, and Australia announced sanctions against Russia. The global cryptocurrency market cap has increased by 4.5% during the past 24 hours.

Bitcoin has gained from around $36K to $38K at the time of writing. On the other hand, Ether has also made a 6% gain during the past 24 hours to trade at above $2600. The largest gainers in the top-ten largest cryptocurrencies are Terra and Avalanche, which have surged by 13.47% and 10.78%, respectively.

Despite this recovery, the founder of Huobi, Du Jun, does not believe that a bullish market is around the corner. According to the executive, Bitcoin will enter another bull market in late 2024 or early 20225 after the next halving process.

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