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Highlights
- One thing that the Ukraine-Russia conflict is testing is Bitcoin’s real-life usefulness as a decentralised, peer-to-peer system.
- Bitcoin has long been touted as a safe haven for investors to protect their capital against rising inflation.
- If Bitcoin is indeed a safe haven, the coming months could see increased investment in the largest cryptocurrency by market capitalisation
Tensions between Ukraine and Russia are currently at fever pitch as thousands of Russian troops are lined up on the border ready for a possible invasion.
This potentially explosive situation has made stock markets extremely nervous given the extreme cost of war, not to mention the potential financial upheaval if sanctions are imposed on Russia.
But what will this conflict mean for Bitcoin and the wider crypto market, if a war breaks out in eastern Europe?
Image Source: © Mcseem | Megapixl.com
Bitcoin being used to help Ukraine army
One thing that this conflict is testing is Bitcoin’s real-life usefulness as a decentralised, peer-to-peer system.
According to research done by the DeVere Group, Bitcoin is being crowdfunded and donated to Ukrainian non-governmental organisations.
The research further claims that Bitcoin is also being used to provide the Ukrainian army with military equipment as well as medical supplies.
It’s the nature of Bitcoin’s blockchain that makes this kind of crowdfunding possible. Bitcoin removes centralised control and provides anonymity, which means that people can move money that might otherwise be traced and blocked by government bodies.
Bitcoin safe haven
Bitcoin has long been touted as a safe haven for investors to protect their capital against rising inflation. The current geopolitical status of the globe will, no doubt, test that assertion.
Rising conflict levels between Ukraine and Russia is being compounded by rising interest rates in the US, as the Federal Reserve looks towards increasing those rates by 50 basis points in March.
If Bitcoin is indeed the safe haven that enthusiasts claim it is, the coming months could see increased investment in the biggest cryptocurrency by market capitalisation.
Indeed, February has been a good month for Bitcoin, which rose from around US$37,000 levels on February 1 to its current value of around US$43,500 – a growth of over 17%.
Bitcoin’s performance in February so far has come after a period of decline which saw Bitcoin fall around 40% from record highs in November 2021.
Many analysts have pointed towards Bitcoin’s February recovery as evidence that the token is no longer in a down cycle and pushing towards a more bullish market.
Bottom Line
It’s unfortunate that it takes global conflict to expose Bitcoin’s usefulness for what it is: an untraceable, anonymous and decentralised form of currency. But here we are.
It’s likely that this revelation has had a role in Bitcoin’s February recovery.
What unfolds over the next week on the Ukraine/Russia border will be crucial for Bitcoin. All that can be said for certain, as of this moment, is that investors are throwing their weight behind the largest crypto.
