More Losses for Bitcoin Amid Heightening Global Risk Asset Sell-Off

2 years ago

Experts estimated that they would lose some value in their portfolio due to Russia’s invasion of Ukraine. Reportedly, the current situation has gone way above those estimates. The impact of Russia’s invasion is way deeper, and it is expected to leave a long-lasting impact on the global market.

Several commodities have witnessed a rise in their price, showcasing a direct effect of the invasion. The financial markets that are being victimized by the current situation are both traditional and digital.

BTC Falls After Achieving Gains

To start with the digital financial market, Bitcoin is down below the mark of $38,000. It continues to trade sideways after showing strength in the previous week. The current value, as of the time of writing, is the lowest in the past seven days.

The fall of 10.39% is a matter of concern as it raises questions about traders selling their holdings. Despite these difficult conditions, Bitcoin predictions are painting a brighter picture, with the value of $72,000 being a possibility by the end of 2022.

Mass adoption is one factor that could make it happen, but the Russia-Ukraine conflict has caused a surge in the volatility of digital assets.

Other cryptocurrencies to witness a similar downward trend include Ethereum, Solana, Avalanche, and Cardano. While Bitcoin has fallen by around 4.8% in the past 24 hours, Ethereum has gone down by nearly 7%. Other cryptocurrencies are witnessing a downfall in the same range.

The traditional financial infrastructure is also tumbling due to the Russia-Ukraine conflict. Nasdaq 100 has fallen by 3%, and S&P 500 is seeing its worst performance of the year.

What these figures ultimately go on to prove is that the conflict is having a wider impact on the global financial market.

As for cryptocurrency, especially Bitcoin, the performance has gone on to reach its worst level. Bitcoin was gaining around $45,000; however, the conflict has brought it down to the mark of $38,000.

The value may fall further as there are concerns about the United States of America prohibiting the import of Russian oil in collaboration with its allies.

Antoni Trenchov, a Co-Founder & the Managing Partner of Nexo, said that there were many competing narratives attached to bitcoin. He further referred to bitcoin as a risk-on asset and also as a risk-off asset.

Edward Moya, a Senior Market Analyst at Oanda, wrote a note saying that Bitcoin’s further fall to $37,000 could put some pressure on traders to sell their holdings.

On the other side, Joe Biden is planning to sign an executive order, suggesting the formation of a strategy for cryptocurrencies. He is expected to put his signature on the document this week.

According to analysts, the order will seek to examine the potential regulatory changes along with their economic impact and any threat to national security.