TL;DR Breakdown
- Fears of war between Russia and Ukraine is impacting the global crypto market.
- Market Volatility Index (VIX) has jumped by 15% since last week.
- Bitcoin fear and greed index is trending at ‘Extreme Fear’.
Geopolitical tension between Russia and Ukraine is reaching a boiling point, and it’s taking a toll on crypto. Bitcoin price plunged below $37k yesterday, as war fears were growing among the two regions. All major crypto including Ethereum, XRP, Solana and Doge followed the same pattern, as a fear and greed index is trending at ‘Extreme Fear’.
The overall crypto market lost more than 3% of its value in the last 24 hours. Both the crypto and US stock market plunged simultaneously after President Biden announced that Russia could invade Ukraine in the coming days.
Experts have already claimed that the ongoing geopolitical tension will continue to bring worries for crypto investors for a long time. Just last week, the Ukrainian parliament had passed a bill to legalize cryptocurrencies. While crypto investors welcomed this news with open arms, the growing political and military tension from Moscow has somewhat spoiled the party.
However, some crypto experts are saying that the ongoing bear market is happening naturally due to the mining cycle of crypto. The co-founder of Huobi exchange believes that another Bitcoin bull run won’t happen again until 2024.
Why is the Russia-Ukraine crisis affecting crypto?
Geopolitics is a major trigger factor for crypto volatility. This is because cryptocurrency prices depend on how investors react to the overall financial market. The ongoing Russia-Ukraine crisis is creating fear among investors. This is because negative events like war or disaster lead to major inflation.
Oil prices have already soared to $100 per barrel due to the ongoing crisis. The market volatility index (VIX) has also jumped by 15% since last week. Financial regulators have also declared caution saying that any significant sanction on Russia could disrupt the global financial stability.
These are the underlying factors leading to the overall crypto market disruption. If the geopolitical tension between Russia and Ukraine grows, it could further disrupt the global financial market, including the crypto market.
Bitcoin is currently trading just below $38k, as investors have their eyes glued to the ongoing global tension.
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