Bitcoin and cryptocurrency prices have gone into free fall after Russia escalated the crisis in Ukraine and deployed Russian troops to eastern regions of the country.
The bitcoin price fell to lows of $36,370 per bitcoin last night before rebounding slightly, down almost 20% on this time last week. Ethereum and other top ten cryptocurrencies including BNB, solana, cardano and XRP all fell even more sharply, with cardano and XRP leading the market lower with 15% declines over the last 24 hours.
The latest crypto price crash, coming on the heels of a slump in crypto and equity prices across the board, has wiped an eye-watering $400 billion from the combined $1.6 trillion crypto market over the last week as sentiment returns to “extreme fear.”
Sign up now for the free CryptoCodex—A daily newsletter for the crypto-curious. Helping you understand the world of bitcoin and crypto, every weekday
“Bitcoin’s safe haven narrative has almost completely fallen apart as the rising possibility of military conflict and the worsening U.S.-Russia relationship puts the wider financial market in risk-aversion mode,” Yuya Hasegawa, crypto market analyst at Bitbank, wrote in an emailed note.
The closely watched Crypto Fear and Greed Index which measures bitcoin sentiment has fallen back to a reading of “extreme fear” after strengthening since the crypto market’s January lows.
“Risky assets, from stocks to digital currencies, [have] collapsed with the aggravation of the situation around Ukraine, where investors fear conflict in Eastern Europe,” Alex Kuptsikevich, senior financial analyst at FxPro, wrote in emailed comments.
Over the last couple of years, bitcoin and to a lesser extent some other big cryptocurrencies, has developed a reputation as hedges against traditional market fluctuations but since late last year the crypto market has traded in line with stocks—falling by almost 50% after the Federal Reserve said it’s gearing up the remove pandemic-era stimulus measures.
The price of gold, where investors often flee to in times of uncertainty, has soared in recent weeks as tensions mounted along the Ukraine border.
CryptoCodex—A free, daily newsletter for the crypto-curious
The bitcoin and crypto market has rocketed higher over the last 24 months, climbing from a combined value of under $300 billion to a blistering $3 trillion before crashing back.
Ethereum and the price of its big rivals BNB, solana and cardano have outpaced the bitcoin price since early 2020 as traders and investors bet the major smart contract blockchains will eventually form the basis of a decentralized internet.