The Russian invasion of Ukraine has brought to light a relevant aspect of the crypto market, which is that decentralized currencies, those without the interference of the respective issuing governments, can be an alternative for the population in a time of crisis.
One example is the current situation of Russian citizens. As a sanction for hostile actions in Ukraine, the country can be excluded from the Swift system, a facilitator of international transactions. Thus, one option for the population is the use of bitcoin.
“With the limitation for Russians to trade in dollars, pounds, and yen, they can go after bitcoin as an alternative because it is a decentralized currency without interference from government decisions”, said Transfero’s Director of Products and Partnerships, Safiri Felix, in an interview with Valor.
For Felix, the trend is that all countries that suffer sanctions from the United States will use more cryptoassets as an alternative for payments, transfers, and as a store of value.
The crisis also highlights risk aversion
Besides this aspect of the crypto sector as a tool for a store of value, Felix pointed out that the geopolitical crisis brought a certain insecurity to the market. The evidence was the devaluation of virtual currencies on the day of the Russian invasion, reflecting an almost automatic movement of risk aversion. Despite bitcoin being a protective asset, gold rose 0.83% on February 24, the beginning of the conflict.
Although price drops can be buying opportunities, the moment requires caution. As Russia and Ukraine are global hubs for bitcoin mining, a prolonged war in the region could reduce the activity, with immediate reflections on the cryptoassets devaluation, especially bitcoin.
