Ever since the boom of Bitcoin and other cryptocurrencies, skeptics have thrown various questions about the usability of crypto. The hype is continuously increasing around the crypto market, mainly Bitcoin. Nonetheless, Bitcoin buffs have always praised and stood by the leading cryptocurrency token, leading to its rise and growth since its inception.
At present times, the world is facing many issues on the global political and economic front. Initially, the after-effects of COVID deteriorated the global economy. The global inflation rate is increasing at a concerning rate. The economies of several countries have plunged in response to such drastic economic fluctuations.
The conflict between Russia and Ukraine has recently added to the global economic misery. Amidst all the chaos, the crypto market has not been performing at a constant rate. Several tokens and digital assets are experiencing swinging momentum in their valuation. The investors have also stayed speculative about the market.
However, since Bitcoin’s inception, it was believed that such assets would act as a hedge against inflation. Bitcoin buffs were adamant that when inflation would increase, people would resort to saving their money in a digital asset. Not only this, but digital assets will also offer a way out when the war breaks and states would move to take control of the assets of citizens. Since the start of the war between Russia and Ukraine, this phenomenon has been quite evident.
The present analysis of the geopolitical and economic events
Major states of the world are going through some very testing times. Starting with the USA, the rate of inflation has never been higher than what it is at this time, with the VIX rising to 80% in 2022. Along with the US, many other countries are struggling. Several developing economies are crashing due to the rising global inflation. This is why people are showing more interest in crypto.
Moreover, anti-vaccine protests within Canada were addressed by the government by threatening to freeze the bank accounts of protestants. This meant that the people would not be able to have access to their assets. It called for investing in a type of money that would have zero connections with the government, making it impossible for them to seize their assets. This drew all the attention to investing in the crypto market for the citizens of the state.
The Russia-Ukraine crisis has brought about sanctions that have left the Russian economy in bits and pieces. Various US companies have withdrawn from Russia, making it nearly impossible for the residents to access their bank accounts and savings. International bank accounts and properties of Russian citizens have been frozen. The US has imposed several sanctions to hurt the Russian Economy.
Impact of the current world conditions on the crypto market
Several experts believed that present times might become a reason for the crypto market to boom in a manner never seen before. However, that has not been the case till now. From what is seen and observed, the prices of Bitcoin and other cryptocurrencies have been subjected to a steady decline.
The prices of Bitcoin have fallen by over 9% in the last seven days. Ethereum went down by over 8% in the meantime. The percussions were felt by the altcoin market as well. Moreover, the losses are even more intense if we consider the price fluctuation over the last month or so.
Bitcoin’s trading volume did rise when Russia invaded Ukraine, but it has not been able to maintain that pace after that. Experts understood from this that people were not willing to trade their ruble and hryvnia to invest in assets in the crypto market. A state of fear has prevailed in the market for several weeks now.
Increasing use of cryptocurrencies
Crypto was seen as a beacon of hope for the Ukrainians. It has opened up a way for the rest of the world to be able to make donations in a relatively different way through wallet addresses. It took into perspective the case of some Canadian truckers who raised money by using crypto donations. The government of Ukraine has also started accepting crypto donations.
Ukraine launched its crypto wallet to accept Bitcoin, Ethereum, Dogecoin, and several other tokens. According to statistics, the government of Ukraine has been able to raise nearly $100 million using crypto donations. These military donations have helped Ukraine to fight against the Russian invasion.
Now that the world has found itself in the middle of all this chaos, the role of the crypto market has become even more apparent. The present situation has put forward how the Russian and Ukrainian conflict has transformed the crypto market and people’s investment in it as a weapon against inflation and the plunging fiat market.
Both of these countries are using it as per their requirement. Ukraine has been using the crypto market to receive donations, Russia has been using it to recover from the crisis faced by the Russian Ruble. It shows that cryptocurrencies are becoming increasingly popular throughout the world.
Many enthusiasts view the crypto market as a game-changer during the Russian and Ukrainian conflict. Why? Because they have not only managed to address the flaws of the traditional banking system but have also managed to create a more fast and more convenient system for digital transactions to occur. Not much can be said about how the present conditions can change the narrative, but certain states have already started investing in the crypto market if things go downhill.