- Russia’s impending invasion of Ukraine has had dire consequences for the cryptocurrency ecosystem.
- At the end of the week, Bitcoin, Ethereum and other altcoins plunged.
- Ethereum founder Vitalik Buterin has expressed concern over an invasion.
As the world watches on, investors are ditching their digital assets in anticipation of chaos. In the midst of it all, the Russian-Canadian founder of Ethereum tries to be the voice of reason.
Russia and Ukraine Dance Hurts Crypto
On Friday, the cryptocurrency market experienced a price spike that resulted in the loss of billions of dollars in value. The cause of this was believed to be growing tensions between Ukraine and Russia, with the Kremlin ordering the movement of troops to the borders. According to information from the White House, the US government believes that Russia could invade Ukraine in the coming days.
The result was a devastating loss for cryptocurrencies as investors panicked. Bitcoin slid 3.27% to trade at $39,965 while Ethereum lost 6.98% in less than a day. Perhaps the grim nature of the decline in values was felt by the altcoin markets, with Solana, Cardano and Avalanche losing 11.66%, 9.97% and 11.24% respectively. Shiba Inu and Dogecoin were not left behind as they also posted double-digit losses.
On a larger scale, trading volumes have fallen by more than 17.10%, while the global cryptocurrency market capitalization stands at less than $2 trillion after a cumulative loss of 5.15%. While the selloff is believed to be due to the impending invasion, there is the worrying threat of inflation which continues to be a thorn in investors’ flesh. The recent inflation report for January puts the US figures at 7.5%, the highest in nearly 40 years. Given the growing correlation between cryptocurrencies and the stock market, investors are also abandoning their digital assets.
On the other hand, there is the use of cryptocurrencies to finance NGOs according to a report by Elliptic. The report notes that there has been a surge in BTC donations to NGOs in Ukraine which are being used to equip the Ukrainian military against the planned Russian invasion.
Kicking Vitalik Buterin
Ethereum co-founder Vitalik Buterin has expressed his displeasure with Russia’s proposed plan to invade Ukraine. The Russian-Canadian took to Twitter to air his views in Russian, which was a break from his typical mode of English.
“An attack on Ukraine can only harm Russia, Ukraine and humanity. Whether the situation returns to a peaceful path or whether there is a war can now be decided not by Zelensky, not by NATO, but by @KremlinRussia. I hope they choose wisely,” he wrote.
Vitalik Buterin is no stranger to interactions with the Kremlin after having a conversation with Putin in 2017 in an effort to foster increased use of cryptocurrency in the country. Buterin’s father openly called Putin’s government murderous. Russia is one of the biggest hash rate contributors to the Bitcoin network after hosting a significant number of runaway miners following the Chinese crackdown.