Will the Russia-Ukraine War Erase Crypto Market Gains?

Russia-Ukraine War

NAIROBI (CoinChapter.com)— The cryptocurrency market has surged recently, with the global market cap crossing $3.1 trillion—a 2.8% increase in the last day. However, escalating tensions from the Russia-Ukraine war, including nuclear threats, are raising concerns about whether these gains can hold.

Crypto Market Gains: A Bull Run in Full Swing

The crypto market has been on a good rising trend. The global market cap of cryptocurrencies set new records after Bitcoin surged to $92,928. Other giants such as Ethereum, Solana, and XRP have risen by more than ten percent in the past month, however, XRP has skyrocketed by over 101 percent.

Crypto Market
Top crypto performance by market cap. Source: CoinMarketCap

The daily trading volume reflects the bullish sentiment, with Bitcoin alone recording over $70 billion in 24-hour trades. This momentum underscores the market’s renewed strength, but geopolitical tensions could derail this recovery.

Nuclear Threats and Crypto Market Volatility

The geopolitical situation intensified as Russian President Vladimir Putin approved using nuclear weapons against non-nuclear states backed by nuclear powers. This follows Ukraine’s U.S.-approved strikes with long-range missiles on Russian targets.

Crypto Market
Crypto HornHairs highlights muted Bitcoin reaction to geopolitical tensions. Source: X

Safe-haven assets such as the U.S. dollar, Swiss franc, and Japanese yen have gained as investors seek refuge. Equities dipped, and cryptocurrencies, while largely resilient, showed signs of increased volatility. Analysts noted muted Bitcoin reactions but warned that sustained tensions could impact the market further.

Will the Gains Hold?

Historical data suggests that cryptocurrencies often see initial sell-offs during geopolitical crises, followed by recoveries as markets stabilize. During Russia’s invasion of Ukraine in February 2022, Bitcoin briefly dropped by 8% before rebounding days later.

Russia-Ukraine War, Will the Russia-Ukraine War Erase Crypto Market Gains?
Bitcoin plunges 8% post-Russia-Ukraine invasion. Source: Refinitiv

Nuclear threats and economic sanctions could further destabilize volatile energy markets, creating challenges for investors. The future of market values will likely hinge on the war’s progression and its broader financial impact.

The Russia-Ukraine war is testing the crypto market’s recent momentum. With escalating tensions, volatility is unavoidable, making geopolitical developments crucial for investors to monitor.

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