Moving undeterred by the sanctions imposed by certain Western countries.
Among a great number of possible effects that the war could have or may have already had globally, the effect on the crypto industry is discussed as well.
On Friday, the majority of the crypto market has recovered over the past 24 hours, since the overall redness observed yesterday – even if still largely read over the week. Bitcoin (BTC) is trading around USD 39,000, while Ethereum(ETH) is testing the USD 2,700 level again.
Popular analysts are saying that “Markets across the board are dancing to the tune of geopolitical events.”
According to the trading team at the crypto exchange Bitfinex, quote “there is still tremendous development and innovation across the digital token economy,” despite the current events in Europe, with long-term sustainable projects laying solid foundations for future growth.
Anto Paroian, ChiefOperating Officer at digital asset investment fund ARK36, also argued that for a couple of weeks already, the main driver of price moves “in the broader risk asset spectrum” has been the prospect of geopolitical escalation – and now that the war did happen, investors rushed "to take risk off the table."
Not everybody agrees on withsome of the above-shared opinions, however.
Mati Greenspan, the founder and CEO of Quantum Economics, told that geopolitical affairs haven't had much of an impact on financial markets, and“certainly not on bitcoin.”
The CEO went on to say that the number one crypto has “almost never been affected significantly by a geopolitical event before,” with rare exceptions occurring while the market was underdeveloped. But overall, he opined,
“Bitcoin tends to trade on its fundamentals and not on the fundamentals of geopolitics.”
So where could BTC go from here?
While the market is up today, Ruud Feltkamp, CEO of crypto trading bot Cryptohopper, said in a comment yesterday that he was “very curious how the Bitcoin price would react” to the developments in Ukraine.
Feltkamp’s conclusion is that,
“I honestly think it's doing pretty ok. Regardless of the war, I expected a slight move down anyway, after which another [USD 40,000] retest is expected. Whether this will still happen is, of course, the question.”
Dr. Amber Ghaddar, co-founder of chain-agnostic protocol AllianceBlock, opined that BTC and crypto, in general, have been showing high correlation and high beta to risk-on assets for the past year, adding:
“In the current risk-off environment, BTC and crypto have a negative outlook except for positive idiosyncratic events that could sustain prices. An increase in Russian military action will keep putting downside pressure on prices.”
NFTsand stablecoins in the face of volatile geopolitics
Meanwhile, Amber Ghaddar discussed the most and the least vulnerable crypto market segments. Other than stablecoins, she said, the least vulnerable should be-fungible tokens (NFTs).
As most NFT investors are not traders but collectors we can expect two things, she said:
either their crypto price will increase to edge closer to the previous dollar value – especially for blue-chip names,
or the floor will remain stable, creating opportunities for those still holding stablecoin
Furthermore, she argues that it would be interesting to keep an eye on
· Algorithmic stablecoins to see if they keep their peg.
· And on the performance of other layers 1 to Ethereum (ETH), which could be an indicator of a loss of market dominance, particularly Solana (SOL), Cosmos (ATOM), Terra (LUNA), Avalanche (AVAX), etc).
