Russian troops moved into eastern Ukraine territories late on Monday night, just hours after Vladimir Putin recognized the independence of Donetsk and Luhansk, two Ukrainian regions, which Moscow-backed separatists occupied in 2014.
World leaders condemned the Kremlin for violating international agreements and have accused it of creating a pretext for war.
While NATO and ES allies prepare to announce sanctions against the Kremlin, the markets have already responded to the news with a harsh reaction.
Crypto Drops, Gold and Oil Rushes
The increasing geopolitical tensions have driven both the stock and cryptocurrency markets down in recent days. The majority of Altcoins on the market fell sharply over the last 24 hours, and bitcoin sank below the $37K support level and even tested the $36.28K mark early on Tuesday.
The global crypto market cap decreased by nearly 6%, or approximately $140 billion over the last 24 hours and is currently sitting at $1.67 trillion as of this writing.
In a meantime, the price of gold rushed to hit a nine-month high. In line with this, oil and gas prices jumped accordingly by 10% and 7% respectively as fears of upcoming supply disruption heighten with Western democracies putting economic sanctions on Russia, one of the world’s largest suppliers of oil and gas.
The price of Brent crude oil reached $99.38 for a barrel, highs not seen since 2014. However, experts warn that it may sprial to $120 a barrel, further fueling global inflation.
The World Reacts
The Russian invasion of Ukraine has drawn backlash around the globe, with world leaders condemning the regime’s aggression and violation of international laws.
President Biden slammed Putin’s “blatant violations of international law” and confirmed that the United States is continuing to closely consult with its Allies and partners, including Ukraine, on the next steps.
NATO chief Jens Stoltenberg condemned the recognition of Donetsk and Luhansk, stating that NATO supports Ukraine’s sovereignty & territorial integrity.
I condemn #Russia recognition of Donetsk/Luhansk in #Ukraine. It erodes efforts to resolve the conflict & violates Minsk agreements. #NATO supports Ukraine sovereignty & territorial integrity. We urge Moscow to stop fuelling conflict & choose diplomacy. https://t.co/H4yczPG8XM— Jens Stoltenberg (@jensstoltenberg) February 21, 2022
The crypto community has by and large shared support for Ukraine and expressed its worries about the general financial and crypto markets’ reactions.
“People asked for a bear market, and here it came. Good luck everyone and god help the people of Ukraine” commented users on Reddit.
Twitter user Crypto Faucets & Crypto News Tweets urged the crypto space to light a candle for the Ukrainians and not to panic in these times of extreme crypto market fear. “Let’s light a wick for Bitcoin and a market as a whole”, he said:
Bitcoin plummets as Poetin orders russian troops to move into the sovereign country of Ukraine. Lets light a candle for the people of Ukraine and lets light a wick for Bitcoin and the market as a whole. https://t.co/aQLHAyi3NM February 22, 2022 at 05:33AM #CryptoCurrency— Crypto Faucets & Crypto News Tweets (@btcfaucets_2022) February 22, 2022
legendary mathematician Nassim Nicholas Taleb referenced the old Latin saying “Hannibal at the gates,” used to express fear or anxiety. He also noted that, in the current geopolitical situation, Bitcoin is proving to act as the complete opposite to a safe haven and hedge against inflation.
Hannibal ad portas.— Nassim Nicholas Taleb (@nntaleb) February 20, 2022
So it turns out #BTC is not a hedge against inflation, not a hedge ag. oil squeezes, not a hedge ag. stocks. And, of course, Bitcoin is not a hedge against geopolitical events --actually the exact opposite.
A perfect sucker game during low interest rates.
Popular entrepreneur and crypto influencer David Gokhstein started the day with a pray for peace for Ukraine. “Now nations will be dragged into a war for no reason but because of one man’s ego”, he shared hours earlier:
Now, nations will be dragged into a war for no reason but because of one man’s ego.— David Gokhshtein (@davidgokhshtein) February 21, 2022
New Zealand-based crypto advocate Lark Davis doubted further World War III escalations, claiming that nobody wants to enter the nuclear war phase. He also blamed financial markets for over-reacting over the Russian invasion to Ukraine:
Ethereum-founder Vitalik Buterin earlier this month remarked that the Russian attack on Ukraine would harm both countries and humanity as a whole. He has not updated his comments on the latest news since:
At the time of writing, European countries and NATO allies have started to impose sanctions, including halting the Nord Stream 2 pipeline from Russia to Germany, and imposing economic sanctions against 5 Russian banks and wealthy individuals.
Bitcoin’s price remains above $37.4K at the time of publishing, however, given the ongoing falls in the Asian stock market, gloomy forecasts of a Bitcoin price drop are gaining strength.
As Aaron Chomsky, the head of the investment department at ICB Fund, told RIA Novosti, the world’s leading crypto may potentially drop to levels as low as $18K as the risk appetite among global investors declines.