Crypto currencies slumped for a sixth day, mirroring a rout in global equity markets, as Russian President Vladimir Putin ordered troops into Ukrain
Crypto currencies slumped for a sixth day, mirroring a rout in global equity markets, as Russian President Vladimir Putin ordered troops into Ukraine.
Bitcoin fell 6.16%, to US$36,819, raising concern the biggest digital token by market value could revisit the 6 month-lows seen in January. Smaller peer Ethereum was down 7.98% at US$2,522.
“US and European futures are tumbling on the back of the geopolitical tensions between Russia and Ukraine,” Naeem Aslam, a market analyst at avatrade said.
“Clearly bitcoin’s reputation as a risk off asset has been damaged given the market volatility we have seen. This is why we are seeing the Bitcoin price plunging.”
Global equites fell, oil prices spiked and gold continued to gain after Putin sent troops into two breakaway republics in the east of Ukraine, prompting UK cabinet member Sajid Javid to tell Sky News an invasion of the country “has begun”.
However, Aslam argued the political tensions were overshadowing the fundamental health of cryptocurrencies.
“When we look at cryptos, there is no doubt that fundamentals are improving, and by this, we mean there is more adoption of digital currencies and regulatory clarity,” said Aslam.
Russia is in the process of drafting legislation to accept crypto as a legal tender and a top official at the European Union admitted the body is open to the use digital tokens, but with stringent regulation.
“However, the price action of Bitcoin and Ethereum continues to scare traders as they have started to think that a bear market may last longer than previously anticipated.”
“It seems like the Bitcoin and Ethereum price may revisit the lows formed earlier this year, but this time around we may not have the same amount of crypto buyers as the last time, which may make the price plunge further.”
Bitcoin fell as low as US$35,000 and Ethereum broke below US$2,500 in January amid concern over the health of the global economy, rising inflation and interest rates and political tensions over Ukraine.
Aslam acknowledged Bitcoin’s reputation as a safe haven “has been damaged given the market volatility we have seen.”
Other altcoins followed Bitcoin and Ethereum lower.
Solana was down 13.74% at US$82.38, Terra 5.48% lower at US$49.17 and Avalanche slumped 15.66% to US$69.13.
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