Bitcoin Recovers Big After U.S. Treasury Lays Sanctions on Russia

The cryptocurrency market recorded a dramatic recovery on Monday,

Now with the Bitcoin network jumping more than 13% and crossing $43,000. the market was sailing on the headwind provided by the U.S. Treasury Department’s imposition of new sanctions on the Russian central bank.

Bitcoin rose by around 10.4% and Ethereum recorded a growth of 7.6% in a day. Besides, U.S. equities also recovered significantly from their recent losses.Overall, the crypto market recovered $200 billion in capitalization. But what do these sanctions mean for everyone and what does this new development mean for investors seeking opportunities on a Bitcoin Trading Platform?

Rebounding Crypto Market

Crypto prices rallied with BTC touching$43,000 after a long time. The overall crypto market cap again crossed the $2 trillion mark, rising by over 10% in a day.

Ether, the Ethereum blockchain’s digital coin, recorded over 10% growth and touched a price of over $2,900. Dogecoin rose by 7% and touched $0.13 while Shiba Inu saw its price increase by 8%. Some of the other tokens that recorded significant growth included:

  • Solana
  • Avalanche
  • XRP
  • Polygon
  • Stellar
  • Cardano
  • Litecoin
  • Terra
  • Polkadot

Impact of the Sanctions

With the new set of sanctions by the Biden administration, the assets of the Russian central bank in the U.S. will be frozen. Besides, Americans will not be able to do business with the bank.

These sanctions showcase the role of crypto in a military conflict scenario. This is the first time the new asset class has been able to demonstrate its potential in such a setting.

Since the day Russia began its invasion of Ukraine, transactions on bitcoin exchanges have risen to their highest levels in many months. The volume of both Russian ruble and Ukrainian Hryvnia trading pairs rose much faster than those for other pairs. This is a clear indication that the war has a direct influence on trading behavior.

Cryptocurrency Proves the Worth of Decentralization

Many industry experts see this crisis as one of the largest accumulation phases. It has been found that Bitcoin received the highest volume of purchase orders at the price of $38,000 than at any other level.

The crisis has also highlighted the benefits of Bitcoin and cryptos in general in terms of their resistance to censorship and their existence as borderless assets. However, this is not seen as the major factor why cryptos outperformed the general markets.The current rise in crypto prices is seen as a reflection on the uncertainty around the Fed hiking interest rates. 

Cryptocurrency &The Russia-Ukraine Conflict

Ukraine’s government raised over $10 million from crypto donations. Overall, the government and non-profits supporting the country’s military received $16.7 million in donations until Sunday.While Bitcoin and other cryptos are in their early stages where prices move primarily due to narrative, their strength in terms of the humanitarian cause cannot be ignored.

As Russia and Ukraine held talks on the Belarusian border, it is seen as a significant event impacting crypto prices. It is expectedto be a big factor affecting Bitcoin and other digital currencies’ price directionin the short term. A lot depends on how the talks, including the second phase of talks, turn out. If they don’t yield any results, many industry experts think that Bitcoin’s price could fall below $37,000.

Has Bitcoin Hit the Bottom?

Most investors want to know whether Bitcoin and other major cryptos have bottomed yet. BTC, Ethereum, and many other cryptos have been following a downward trend since their peaks in November. This means that many other factors have impacted its prices and not just the Russia-Ukraine conflict. This included:

  • Global monetary curbs
  • Uncertainty about regulations
  • Lowered crypto demand from China

However, it has been observed throughout the history of Bitcoin that cyclical downturns phaseout, and the crypto has a general long-term uptrend.BTC has shown some correlation with the S&P 500. The S&P 500 has been found to recover from geopolitical-based sell-offs in an average of 47 days. Bitcoin is also expected to follow a similar path to recovery.

Will this recovery in the crypto market continue? The U.S. and EU are expected to implement even more economic and financial sanctions on Russia and this could trigger additional impact on the digital assets market.

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