- Ruble, the currency of Russia, is facing increased pressure amid rising tensions with Ukraine
- The currency has fallen above the 80 mark against the USD as the West slaps new sanctions
- Vladimir Putin recognized the two breakaway regions of Donetsk and Luhansk on Monday
- Bitcoin (BTC) can provide relief to citizens of Russia and Ukraine amid the escalated crisi
YEREVAN (CoinChapter.com) – Bitcoin (BTC) fell alongside Ruble and global stocks Tuesday as the market assessed Vladimir Putin’s decision to invade eastern Ukraine in what appears to be a heightening geopolitical issue.
The benchmark cryptocurrency fell to an intraday low of $36,350 a day after trading closer to $40,000. Its selloff came as a part of a broader market correction among the risk-on assets, with Europe’s regional Stoxx 600 falling 0.5% and futures linked to the U.S. benchmark S&P 500 dropping 0.05% ahead of the New York opening bell.
On the other hand, Gold outperformed riskier assets, including Bitcoin — its emerging rival to the safe-haven, as it held its gains near $1,900 per ounce.
The Russian ruble was down around 1.75% against the dollar Tuesday, trading near $79. That is 135% below its rate of $35 at the beginning of the Russia-Ukraine crisis in 2014.
What did Vladimir Putin do and cause on Monday?
Russian President Vladimir Putin signed a decree on Monday to recognize the two self-proclaimed rebel republics of Donetsk and Luhansk.
He additionally announced his decision to send “Peacekeeping Troops” to the separatist regions. Ignoring calls of Western Powers to refrain from any armed conflict, President Putin kickstarted what could blow up into a possible full-scale invasion of Ukraine.
Essentially, Putin has tossed the 2015 peace plan out. As a result of the bold military action, the U.S. and the U.K. promised new strict sanctions against Russia. The UN security council also called an emergency meeting to discuss the situation.
Besides the currency, Russian stocks registered their biggest fall since the 2008 global financial crisis. The benchmark MOEX Russia Index fell over 10%. The dollar-denominated RTS Index also plunged over 15%.
The White House has announced sanctions against any investment, trade, and financing in the two breakaway regions of Ukraine. U.S. Ambassador to the United Nations, Linda Thomas-Greenfield further announced additional sanctions on Russia.
“Tomorrow, the United States will impose sanctions on Russia for this clear violation of international law and Ukraine sovereignty and territorial integrity,”Amb. Greenfield told reporters after a U.N. Security Council meeting on Monday.
Prime Minister of UK Boris Johnson called Russia’s actions ” a repudiation of the Minsk agreements.”
The Foreign Policy Chief of the European Union Josep Borrell had also threatened Russia with a sanctions packet.
The two regions, Donetsk and Luhansk, broke away from Ukraine to declare independence in 2014.
Ukraine and the West blamed Russia for organizing the popular unrest in response to the ousting of then-president Viktor Yanukovych. President Yanukovych was a Russian ally who rejected the Ukrainian-European Association Agreement, resulting in the Ukrainian Revolution that forced him to vacate office and flee to Russia.
After heavy fighting and repeated failed peace deals that killed thousands from both sides, Russia and Ukraine signed a European-brokered truce in 2015.
Although the two regions have declared their readiness to join Russia, President Putin has put plans on hold. However, he now feels it is time to reclaim what he calls ancient Russian lands.
36% of Russia’s national budget relies on the export of its natural fuel resources. According to Forbes, the European Union (EU) relies on Russia for about 34% of its natural gas. In addition, about 27% of its oil imports come from Russia.