Tremors of the deafening explosions across Ukraine are being felt throughout the crypto market. With Dmytro Kuleba, Minister of Foreign Affairs, Ukraine confirming the chain of attacks, the market is down by almost 10% and may plunge further. The full-scale attack by Russia has thrown the geopolitical stability of the region in a tizzy, impacting a lot more than the traditional stock markets.
Cryptos like Avalanche and Cardano were already down by over 10% in the wake of what Russia claims is a “Full-Scale Military Operation” on Ukraine. The crypto market capitalization hit $1.61 trillion today, with almost every crypto losing steam.
Yesterday, the overall market trading volumes too were at their lowest at $12.72 million, down by over 99.90%, compared to the day before.
Russian President Vladimir Putin deployed troops across Eastern Ukraine earlier this week on 21 February. The globally condemned move quickly escalated into a full-blown invasion, significantly impacting financial stability and the price of cryptos.
Policy confusion added to the woes of the crypto market, with Russia’s Finance Ministry suggesting a legal market for crypto assets even as its central bank plans to enforce a blanket ban.
Impact on the Broader Crypto Space
The standoff is turning out to be bad for almost all cryptos. Web 3.0 tokens such as Polkadot (DOT) shed over 7% of gains as of yesterday. Memecoins fell by close to 10% overall—something that wasn’t unexpected but is significant nonetheless.
Impact on Bitcoin and Ethereum
Despite being the largest crypto asset by market capitalization and popularity, Bitcoin wasn’t spared either. The crypto giant’s market dominance dipped by 0.16% yesterday, and it is still finding it hard to hold on to the key levels of $35,000 (₹27,65,000).
The impacts of the invasion extend well beyond Bitcoin, though, with Ethereum shedding over 8% to trade under $2,405 (₹1,90,000), at the time of writing.
Is There a Silver Lining to This Smokey Cloud?
All of this is now completely new, even if the context is. A few months ago, the crypto market behaved similarly when the US Fed teased interest hikes. But the market bounced back then—like it always has in the past.
Several key crypto evangelists have spoken up about the escalating situation. For instance, Vitalik Buterin, who is of Russian-Canadian descent, made a veiled reference to the issue on Twitter, revealing his solidarity with Ukraine.
Well-known Canadian businessman Kevin O’Leary tweeted that crypto will become the 12th sector of Standard and Poor’s 500 (S&P 500), despite challenges along the way. His conviction does make crypto feel like a hopeful prospect, especially in the long term.
World events impacting crypto are perhaps signs that the adoption rate is high. The correction seems major as of now. In the past, however, markets have recovered from similar falls.
Keep up with the latest crypto-specific happenings across the globe at CoinSwitch.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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