How the cryptocurrency market is dealing with the global crises
When Russian soldiers invaded Ukraine last month, the whole world was stunned, and markets were supposed to tumble, yet the cryptocurrency market remained firmer than ever. Cryptocurrencies have become a beacon of light guiding us to an alternative financial system, as well as new methods to donate (the Ukrainian government has begun to accept cryptocurrency) and sell Bitcoin in Dubai. Millions of dollars in donations have already been collected.) In the middle of all the confusion and uncertainty, the developing function of cryptocurrency assets has been more apparent than ever before and on a far larger scale.
This is unexpected since, as cryptocurrencies and crypto exchange platforms like Coinsfera have become more prominent parts of the global financial system in recent years, their sensitivity to the repercussions of international conflict has increased.
The facts and context of the cryptocurrency price increase
When Russian President Vladimir Putin declared a “military action” in Ukraine, the cryptocurrency market dropped by almost 10%. But, as it often does, it recovered quickly. The cryptocurrency market reached a new high, and it is currently worth more than $3 trillion.
Bitcoin, which had fallen by 8% when users had to sell Bitcoin, has suddenly climbed by more than 15% in the previous seven days. According to the crypto data business Kaiko, since the start of the war, transactions on centralized Bitcoin exchanges in the Russian Ruble and Ukrainian Hryvnia have reached an all-time high.
Because of the Russia–Ukraine war, cryptocurrencies have become an odd weapon, and both governments are using them to their advantage for better or ill. While the crypto community is donating to Ukraine from all over the world, the Russian Ruble is taking sanctuary in crypto assets. In reaction to Russia’s invasion, a number of nations, including the United States, the European Union, Australia, and Japan, imposed harsh penalties. This has put significant pressure on the Russian ruble.
This has put significant pressure on the Russian fiat currency, allowing cryptos to soar.
The rally’s justification is that it’s common for cryptocurrencies to fluctuate, but this time is different. Despite the global financial crisis, the market is stronger than ever. The idea that digital currencies are secure assets is gaining traction. Some of the causes for this are unrelated to the conflict, while others are.
External factors are propelling the rally
It’s a terrible moment right now, with the possibility of a third global war approaching. Even in less dire conditions than the current one, cryptocurrency traders have resorted to panic selling. So it’s a strange fact that they haven’t done so yet.
The reason that we are not witnessing panic to sell BTC in Dubai is likely due in part to many HODLers adhering to the abbreviation HODL, which stands for “Hold On for Dear Life.” HODLers are cryptocurrency investors that purchase and keep their assets regardless of market volatility. HODLing is regarded as one of the most effective investment strategies.
Examples of global applications
The world is getting a taste of the possibilities offered by cryptocurrencies and the blockchain technology that underpin them. The crypto sector hit so many milestones in 2021, and the growth and financial gains of Non-Fungible Tokens (NFTs) captivated the entire world.
Both Bitcoin and Ethereum, the world’s most popular cryptocurrency, have reached all-time highs. Blockchain technologies are conquering territories in 2022, and Decentralized Finance (DeFi) will play an important role.
Do Your Own Research (DYOR)
DYOR is a popular slogan in the crypto world. People are learning to DYOR more as crypto becomes more widespread in order to comprehend the hows, whys, whats, and whens of purchasing crypto assets.
There is already a wealth of material available on the internet on investing strategies—all the dos and don’ts, which coins and tokens to invest in, when to HODL and when to sell, and so on. DYOR assists investors in filtering through this information and reducing misconceptions. The rally is being driven by conflict-related issues.
Donations in cryptocurrency
The Ukrainian government has asked the cryptocurrency community to donate to the country on February 26th, 2022. Accepting cryptocurrency donations is new for the country and most of the globe, but it appears to be paying off quite nicely.
Over 1,02,000 bitcoin contributions totaling $54.7 million have been received thus far. And Polkadot’s founder, Gavin Wood, has produced.
The effect on traditional banking
In times like this, it is impossible to rely on traditional banks since governments are also in disarray. That is why the world discovered a means to assist warring countries via cryptography.
Both the Ukrainian and Russian governments are benefiting from cryptocurrency. Only time will tell if this is a good or negative thing. But, for the time being, when both nations want a system that is free of government intervention and is somewhat anonymous, crypto is coming to the rescue.
Many bitcoin aficionados see the Russia–Ukraine crisis as a game-changer that might affect the future of cryptocurrency. Cryptocurrencies are resolving the flaws and limitations of the existing financial system, putting critics who keep labeling cryptos “simply a bubble” to shame. They have functioned as a store of wealth as well as a way of performing quick digital transactions.
It remains to be seen whether this will influence the narrative of how governments throughout the world regard digital assets. However, others, including the Indian government, have already begun to warm to them, and the future of bitcoin in India is bright.
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