2022 has undoubtedly been a rocky ride for crypto. It was a volatile first quarter of the year for major players such as Bitcoin and Ethereum. Around the end of January going into February, the cryptocurrency market cap declined by about $205 billion within a span of 24 hours. The major market indices also crashed and were treading the correction territory during the period too. This isn’t a first, nor will it be the last until things stable out. What is especially interesting is the price impacts of the war that has been brewing between Russia and Ukraine. Particularly considering that both the US and Russia have been head runners in being the top crypto mining places. In the world, following China’s mining departure within the past year.
Indeed, much of this turbulence has continued since the first quarter as we approach the midpoint of Q2 2022. Also, how much of this can contribute to international disputes is certainly up for debate.
The conflict that leads to war have been economically, historically known as ‘economy boosters,’. Further many, are perceiving it as a good sign for the bears as the focus shifts to the issue at hand and away from more speculative investments. Further, many buy or sell at much higher rates than usual. This also could lead to many buying at a low value and holding until everything plays out and the world chills out. While crypto took a hit, some can say it’s due to many sanctions – but also war helping effort. War can exacerbate the impact that crypto can have positively on these international flights.
Furthermore, people in Ukraine are turning to crypto as an alternative to Ukrainian financial institutions. This is limiting people’s access to bank accounts and foreign currency.
Impact of War & Crypto
The war is showing us all how fast economics can change. The dramatic shifts in the power of any country’s dollar in how it can become diluted in a short time. From a speculative viewpoint, many countries could turn to crypto or, at minimum, state-issued digital currencies. Crypto has the power to help in many ways. Like when the system crashes by providing ways to transfer and send money while also providing a new system via Web3.