The prices of Bitcoin and other cryptocurrencies are jumping after a fall this week in the value of the Russian currency – a signal, according to some analysts, that Russian investors are changing their ruble money as economic sanctions against the country for its invasion of Ukraine to strengthen.
Bitcoin rose $ 44,188 on Wednesday after falling to $ 36,370 last week. Other leading cryptocurrencies, such as ethereum, ripple, and solana, were flat or gained at least 2%.
Meanwhile, the ruble fell to an all-time low against the dollar on Monday and fell less than 1 U.S. centand has been around ever since.
Investors are “trying to get out of the ruble” after its “drastic devaluation after all sanctions,” Bendik Schei, head of research at Norway-based Arcane Research, told CBS MoneyWatch.
“Under current market conditions, I’m not surprised to see investors, at least from Russia, looking for stable currencies,” Schei said. Stable currencies are considered less volatile than cryptocurrencies because the value of the underlying cryptocurrency is fixed in a traditional currency such as the US dollar or a hard asset such as gold.
Another factor that could drive up cryptocurrency prices is the growing unease among some younger investors about government actions affecting currency prices, including this week’s economic sanctions against Russia.
“There’s a whole new generation of investors out there who, for some reason, have become in government doubt,” said Michael Oliver, chief analyst at financial firm Momentum Structural Analysis. . “What is happening between Ukraine and Russia is an example of people thinking, ‘Wow, is my money safe in this bank account?’
These investors see cryptocurrency as a way to “hide their money” from government control, he added.
Some people are also using cryptocurrency to give money to Ukraine. Investors have donated more than $ 22 million in cryptocurrencies to the Ukrainian government during the conflict, according to blockchain analytics firm Elliptic.
Cryptocurrency can be used “to give causes around the world with much less friction than the existing banking system,” George Harrap, co-founder of Solana’s portfolio manager Step Finance, told CBS MoneyWatch.
Dodge sanctions?
David Szakonyi, a professor of political science at George Washington University, believes that Russian leaders could use cryptography to help the country support its financial sector, although he notes that digital currencies are unlikely to “serve as to replace corporate transactions over time “.
According to the Associated Press, U.S. Treasury and law enforcement officials are stepping up their efforts to combat the misuse of cryptography to evade sanctions. But many cryptocurrencies, including Coinbase, Coinberry and KuCoin, have said they do not plan to close Russia-based accounts, resisting pressure to join the Western effort to cut the country off of global payment networks. .
“We will not unilaterally freeze millions of innocent user accounts,” Binance, the world’s largest cryptocurrency exchange, said in a statement last week. “Crypto is intended to provide greater financial freedom for people around the world. Unilaterally deciding to ban people’s access to their cryptography would be contrary to the reason why cryptography exists.”
Binance said on Monday it would freeze the cryptocurrency accounts of Russian officials on U.S. and allied sanctions lists, Reuters reported.
Kraken, another trading platform, will not close its Russian accounts unless the company is legally required to do so, CEO Jesse Powell said in a statement. Twitter.
“Our mission in Kraken is to take individual humans out of the inherited financial system and take them into the world of cryptography, where the arbitrary lines of maps no longer matter, where they don’t have to worry about getting caught up in a vast wealth of indiscriminate. confiscation, “Powell tweeted.
The Associated Press contributed to this report.
- In:
- ethereum
- Ukraine
- cryptocurrency
- bitcoin
- Vladimir Putin
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