Bitcoin as an Asset Class
Bitcoin has risen 10% on the Russian invasion of the capital of Ukraine, Kiev, now pronounced in Ukrainian as Griev, rather than the Russian pronunciation of Kiev.
Bitcoin is beginning to prove that it is not just a useful tool against inflation, but a recognised worldwide brand and safe haven currency, as well as a separate asset class than gold or stocks. Bitcoin has risen 10% as stocks worldwide have fallen.
Bitcoin in Russia
The world is freezing Russian oligarch’s bank accounts and freezing out Russians from using SWIFT, the international banking system and a ban on deals with Russia’s central bank, which holds much of its $630 billion in foreign exchange reserves in overseas coffers.
Meanwhile Bitcoin’s market cap sees it become bigger than the ruble’s $630 billion in foreign exchange reserves, with over $837 billion of Bitcoin held worldwide.
The Ruble fell 30% against the USD on sanctions against Russia, so Russians have been using Bitcoin to avoid a 30% drop in their local currency, RUB. According to data by blockchain analytics company Kaiko, published in Coindesk, ruble-denominated Bitcoin trades blew up by as much as $1.5 billion on Thursday.
The bulk of the activity was concentrated on Binance who are allowing the trades and protecting the identity of their clients.
The Russian government has closed the Russian stock market, imposed capital controls and more than doubled its interest rate to 20% to try to stem rubles flowing out of the country.
Russian, Ethereum founder Vitalik Buterin took to Twitter in his native Russian to decry the invasion and crypto donations to help Ukraine are on the rise.
Some Russian soldiers are also regretting being dragged into the war and calling for a stop to the war.
Russia has been frozen out of the world’s financial system and now has gone back to a Cold War, closed economy. The Russian stock market has closed, whilst Russian stocks listed abroad such as Gazprom have fallen 50%.
Crypto could provide a means for Russians to evade economic restrictions, but that may not be the case for much longer. Per a report in the Wall Street Journal, the Biden administration is in the “early stages” of exploring sanctions on Russian crypto activity, targeting exchanges that violate bans against transactions with blacklisted Russian banks.
Bitcoin in Ukraine
In Ukraine, locals have had trouble withdrawing the Hryvnia (UAH) from ATMs and some Ukrainians are also turning to Bitcoin during the panic.
However, despite this, the Ukranian currency has remained resilient, especially with the world donating $4 billion to Ukraine to fight its war with Russia.
The Ukrainian Hryvnia Polish Zloty (UAH/PLN) exchange rate is on the rise on Tuesday building on gains from the previous session. The pair settled +1.95% higher yesterday at 0.1394 in the middle of the daily traded range. At 14:30 UTC, UAH/PLN trades +1.2% at 0.1412.
Today, the pair is pushing higher as it extends its recovery from the 2022 low of, a level that was last seen in June last year. The Ukraine national currency is showing resilience even as the conflict in Ukraine deepens.
Yesterday, Ukraine’s Vice Prime Minister Mykhailo Fedorov took to Twitter to ask “all major crypto exchanges to block addresses of Russian users.”
Is Ukraine in the EU?
The Ukrainian president, Volodymyr Zelenskyy has officially signed an application for Ukraine’s membership in the European Union and asked for it to be sped up.
About one–third of Ukraine’s 45 million inhabitants use Russian as their mother tongue, particularly in the regions.
Blockchain Enthusiast | Digital Currency Analyst
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