Russia’s imminent invasion of Ukraine has had dire consequences on the cryptocurrency ecosystem.At the close of the week, Bitcoin, Ethereum and other altcoins took a steep dive.Ethereum’s founder, Vitalik Buterin has voiced his concern against an invasion.
As the world watches with bated breaths, investors are dumping their digital assets in anticipation of chaos. In the midst of it all, the Russian-Canadian founder of Ethereum tries to be the voice of reason.
Russia and Ukraine’s Dance Is Hurting Crypto
On Friday, the cryptocurrency market experienced a blip in prices that led to the loss of billions of dollars in value. The cause of this was adjudged to be the mounting tensions between Ukraine and Russia with the Kremlin ordering the movement of troops to the borders. According to information from the White House, the US government believes that Russia could invade Ukraine in the coming days.
The result of this was a devastating loss for cryptocurrencies as investors panicked. Bitcoin slipped by 3.27% to trade at $39,965 while Ethereum lost 6.98% in less than a day. Perhaps, the grim nature of the decline in values was felt by the altcoin markets as Solana, Cardano and Avalanche lost 11.66%, 9.97%, and 11.24% respectively. Shiba Inu and Dogecoin were not left out of the route as they also recorded double-digit losses.
On the larger scale, trading volumes are down by over 17.10% while the global cryptocurrency market cap sits at under $2 trillion after a cumulative loss of 5.15%. While the sell-off is thought to be because of the incoming invasion, there is the worrying threat of inflation that has continued to be a thorn in the flesh of investors. The recent report on inflation for January puts US figures at 7.5%, the highest in almost 40 years. Given the increasing correlation between cryptocurrencies and the stock market, investors are also dumping their digital assets.
On the flip side, there is the use of cryptocurrencies to fund NGOs according to a report by Elliptic. The report noted that there has been a steep rise in BTC donations to NGOs in Ukraine that are being used to equip the Ukrainian army against the planned invasion by Russia.
Vitalik Buterin Kicks
Ethereum co-founder, Vitalik Buterin has voiced his displeasure over Russia’s proposed plan to invade Ukraine. The Russian-Canadian took to Twitter to air his views in the Russian language which was a break from his typical mode of English.
“An attack on Ukraine can only harm Russia, Ukraine, and humanity. Whether the situation will return to a peaceful path or there will be war can now be decided not by Zelensky, not by NATO, but by @KremlinRussia. I hope they choose wisely,” he wrote.
Vitalik Buterin is no stranger to interactions with the Kremlin after he had a conversation with Putin in 2017 in an attempt to foster increased usage of cryptocurrency in the country. Buterin’s father has openly called out Putin’s government as being murderous. Russia is one of the largest contributors of hash rates to the Bitcoin network after it took in a significant number of fleeing miners in the wake of the Chinese crackdown.