Bitcoin Surges Amid Mounting Geopolitical Tension; Reminds How it could be a Safe Haven in Tumultuous Times
Could Bitcoin be a safe haven asset in times of turmoil? The recent rally suggests the Russians of all people are starting to think along those lines.
14:07 01 March 2022
Bitcoin pushed past the stiff resistance of $40000 with ease in a sharp strong move which left several crypto enthusiasts scratching their heads. Out of nowhere, Bitcoin went on a tear and gained almost 15% in a matter of few hours, as the geopolitical tension in Eastern Europe continued to escalate and more sanctions were piled on Russian billionaires and institutions including banks. Ethereum, another major digital token, found buying pressure and gained along, rising to approximately 13% in about 10 hours.
The timing of the surge has shocked industry analysts more than the move itself, who reckon the war situation in Ukraine is actually triggering fresh demand for cryptocurrencies.
It’s not too hard to see why Russians are showing strong interest in buying into the cryptocurrencies after the kind of fall Rubel has seen in the last two weeks and the. Kaiko, a crypto data company, has noted that the transactions on bitcoin exchanges in both the Russian and Ukrainian currencies reached their highest levels in several months. The data suggests that people from both the countries but more so from Russia, in anticipation of more financial pain being inflicted upon them in future, are rushing to transfer their money out in some way.
That’s understandable. The massive crash of Rubel has created a significant amount of pressure on Russians to get their money out, and led many of them to believe cryptocurrencies would be their best bet in current circumstances. Several banks and financial institutions in Russia, including the central bank, are not able to access US dollars, as most of them have been cut out from the SWIFT system. With the traditional financial system turning hostile against them, more and more Russians are led to believe transacting Bitcoin is the only way to go around the sanctions made by the West. As a result, several leading cryptocurrencies, particularly Bitcoin, are benefitting.
Yesterday, the leader of the cryptocurrency pack saw a massive spike in buying level at around $40000, which has proven to be a key level of resistance. Bitcoin went up to $44000 and held those levels for a while before descending and is now stabilizing around $43000 levels. The upside still appears limited with multiple resistances along the way, but the sudden quick surge over the key resistance level has instilled some sense of confidence and belief into investors and traders who were genuinely concerned and anxious over the geopolitical tension spilling over into capital markets.
But this mini rally could snowball into a major trend, as Russians, who’re devastated and shell-shocked by the escalating sanctions on them, start to appreciate that transacting in Bitcoin is a risk worth taking. Unless the West responds to the growing Bitcoin adoption from Russia, this minor rally could turn into something bigger, making Bitcoin the preferred safe asset to rely on particularly in times of war when there is a lot of chaos and uncertainty. At least for the Russians. We need to wait and see how the Western countries would look to approach this growing situation and intercept it with their regulatory policy.
This strong upsurge in Bitcoin and other major digital tokens has some bulls pointing to a break from the growing narrative that crypto is just another risky asset and doesn’t fit the bill of ‘digital gold’ one bit. According to the data put together by Bloomberg, Bitcoin’s correlation with the S&P 500, which was a key measure of how Bitcoin moved in lockstep with the stocks, has also come down after crossing 0.7. It’s still at 0.55, which is certainly on the higher side for any asset to be regarded as a safe haven; but the bulls believe that this number will start sliding further as more people realize Bitcoin is a real hedge to inflation and geopolitical turmoil, and that Bitcoin could take its much-disputed digital gold tag back in a few months.
Things are now looking a lot better than a week ago and it is a great time to jump in if you’re a crypto trader. The digital tokens climbed back up to $2 trillion in market capitalization on the back of yesterday’s sharp, comfortable ascent beyond the $40k mark. The short-term bullish activity has given the market the optimism it lacked all these weeks. If you’ve been waiting on the fence spending all your time watching, now is the time to get into some positions and make some moolah. Maybe you missed the sharp quick surge yesterday and are regretting it now? Don’t worry. You can participate in the market even when you’re asleep. Head on over to bitcoin fast profit to find out how its intelligent crypto algorithm allows hordes of crypto traders from the world over to trade cryptocurrencies automatically without them moving a finger.