Bitcoin Jumps 10% after New Sanctions Imposed by Treasury
On Monday, the crypto market rose after new sanctions were imposed by the Treasury Department against the Russian central bank. There was a 10.4% jump in Bitcoin’s value, as it reached $41,807.16, whereas a 7.6% increase in ether was recorded, which took it to $2,826.54. Earlier in the day, there was a sharp decline in US equities before they managed to recover a huge portion of their losses. Leah Wald, the chief executive of Valkyrie Funds, stated that a strong correlation has been seen between the liquidation of traditional assets and a drop in digital assets in the past. However, it seems that the trend has reversed this time around and the real test is to see if this pattern will hold.
The CEO said that if the pattern does hold, it would actually become a tipping point that everyone has been waiting for, as bitcoin and other digital currencies would have become mainstream. The Biden administration unveiled sanctions that would effectively freeze Russian assets within the United States and prohibit Americans from doing any business with the central bank in Russia. However, this move just highlights the important role crypto can play in the midst of a military conflict. The asset class is relatively young and before this situation, it hasn’t had any such opportunity to show its potential significance.
But, it should be noted that bitcoin’s proponents have often highlighted this aspect of the crypto as part of their bullish stance. According to Kaiko, a crypto data company, centralized bitcoin exchanges have seen a surge in transactions since Thursday, when the invasion first began, involving the Ukrainian hryvnia and also the Russian ruble. They have actually reached their highest level in months. Kaiko said that the trading volume for the trading pairs involving these two currencies had increased quicker than that of others, which indicates that the crisis has also affected trading behavior.
A venture associated at AscendEx, Michael Rinkostated that the number they needed to watch was $38,000. He stated that this was a big accumulation phase and more people had bought bitcoin at $38,000 than at another level. Therefore, it was of the utmost importance. He also emphasized that the conflict was indeed showcasing the censorship-resistant and borderless characteristics of bitcoin. However, he added that this was not the reason why crypto managed to outperform the broader financial markets on Monday. Rinko said that the jump in the crypto market could be because of rate increases being priced out.
He added that there was a great deal of uncertainty about the willingness and the ability of the Fed to aggressively increase rates when the geopolitical backdrop is unpredictable. Nonetheless, he stated that bitcoin and other crypto were in an early phase and narrative was driving its price. He added that the humanitarian case of bitcoin should not be underestimated. Almost $17 million has been raised by the Ukrainian government in crypto donations, as of Sunday. Monday saw officials from Ukraine and Russia gather at the Belarusian border to talk about putting an end to the fight.