Not a safe haven: Bitcoin sinks as Ukraine-Russia tensions mount and gold spikes

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  • Bitcoin has continued to sink at a time when the tension between Russia and Ukraine has continued to worsen, as arch-rival gold spiked with the unrest.
  • Analysts say the technical charts don’t look good for the top crypto and that $30,000 is once again in play following the downturn in form.

As everything else falls apart, Bitcoin will be the solace – this has been the mantra for the top cryptocurrency for ages. The digital safe haven is, however, being picked apart, with the recent tensions between Russia and Ukraine providing another litmus test. BTC has continued to dip amid mounting tensions between the two Eastern European nations, even as gold goes on its best run in months.

At press time, BTC is trading at $37,775. And while it’s marginally up in the past day, the weekly chart shows that it has lost $6,500, or 15 percent of its value. The crypto has been losing value for six straight days, dipping below $36,500 today.

The dip comes at a time when Russia and Ukraine are locked in a spat that many fear could quickly escalate in the coming weeks. In his most recent move, Russian President Vladimir Putin said he recognizes two Ukrainian separatist groups, adding fuel to the fire.

Experts are linking the tensions in Eastern Europe to Bitcoin’s performance, claiming it undermines the argument that BTC is a safe haven in times of conflict. And it’s not just BTC that’s facing the heat, with Ether down 17 percent in the past week, as Cardano, Shiba Inu, Polygon, and Litecoin all lost at least 20 percent.

It doesn’t help that gold has spiked at the time of the crisis, hitting its highest level since June last year.

Bitcoin loses out to gold in safe haven battle

Commenting on the links, John Roque of 22V Research said in a Monday note:

In the globe’s latest maelstrom — U.S./Russia/Ukraine —Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its arch-enemy, gold.

He believes that Bitcoin is heading to $30,000 as more traders ditch it for gold. This is a bold prediction, given that the last time BTC hit that level was in July last year and since then, it went on to hit a new high just short of $69,000 in November.

Even pro-Bitcoin leaders concur that it may be downhill from here for BTC. Antoni Trenchev, the founder of institutional digital asset services provider Nexo says he sees BTC hitting $30,000.

Speaking to Fortune, he stated:

Bitcoin’s inability to hold $40,000 amid heightened Ukraine tensions means $30,000 is back in play. Geopolitics has, for now, replaced inflation as the primary driver of both traditional and crypto markets.

Related: BTC fumbles under $37,000 but Bloomberg analyst predicts major milestone for Bitcoin in 2022

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