- Sam Bankman-Fried, the founder of crypto exchange FTX, thinks the recent sharp drop seen in Bitcoin, and generally crypto, is no surprise with the current crisis between Russia and Ukraine.
- He adds that BTC has now settled halfway since buying and selling pressures have now leveled off.
Crypto and traditional markets are bleeding even more severely following Thursday’s incursion of Russia into Ukraine. The two markets have been on a sell-off in the past week, with a notable free fall starting early Thursday. Since Russia is one of the world’s largest producers of oil, crude oil prices have spiked to an eight-year high above $100. Stocks, on the other hand, have shed over 5 percent in the same period.
For the crypto market, Russia’s declaration of war spelled doom in the name of a $500-billion market sell-off. Most of the cryptocurrencies have now lost their support to trade at three-month lows. The crypto market has, in the past day, declined 11.1 percent to a $1.65 trillion market cap.
Following the Russia – Ukraine unrest, a crypto market dipping is no surprise
Despite being considered an inflationary hedge by some, Bitcoin (BTC) has not been immune to the battering the rest of the markets have received. The crypto asset fell below the $40K mark on Sunday and has continued to plummet even further to $35K. Sam Bankman-Fried, the CEO of FTX crypto exchange and one of Forbes’ 2021 billionaires under 30, says BTC’s dip is no surprise.
1) Some thoughts on crypto, Ukraine, and stocks
— SBF (@SBF_FTX) February 24, 2022
Weighing in on the Eastern European war, Bankman-Fried says it has fueled a sell-off in both traditional and crypto markets. People have less money at their disposal, and whatever they have is being used to fund the war.
Basically, selling BTC – along with stocks, etc. – to pay for the war.
Additionally, negative momentum in the crypto market is in line with that of the Nasdaq and the S&P 500. The two have been shown to have increasingly high correlation in recent times.
The prevailing political crisis is likely destabilizing Eastern European currencies, according to Bankman-Fried. He further suggests that people will likely look for other alternatives, such as Bitcoin.
Time to buy or sell?
The investor went on to classify investor mindsets into two categories: fundamental and algorithmic. The former, he says, rely on market situation and sentiment, while the latter prefer to use data.
Presently, for those with a fundamental mindset, the current situation presents a good buying opportunity. Meanwhile, algorithmic investors would prefer selling due to prevailing data and the crypto market’s interrelation with the equity market.
The push and pull between the two kinds of investors are what has now led Bitcoin to drop halfway. Bankman-Fried ends his thread of tweets with the question of who between the two kinds of investors is right.
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