Bitcoin is falling due to rumors of an impending war between Russia and Ukraine. The stock markets are also involved.
Rising tensions between Russia and Ukraine
The problems between Russia and Ukraine have escalated again in recent months, but reached a peak this Friday. A US secretary has stated that Russia could invade Ukraine any time after the country sent F-15 fighter jets to the region. Neighboring countries have also seen Russia strengthen their borders.
Embassies have started banning travel to the region and several countries have asked citizens to leave Ukraine immediately. South Korea has also warned not to visit both countries and other European countries such as England.
It started with Jake Sullivan, the White House’s national security adviser, who warned Friday afternoon that Russia could invade Ukraine “any moment.” Meanwhile, the Russian army is prepared for an invasion when Russian President Vladimir Putin orders it.
Effects on the stock and crypto market
US stocks extended a selloff and ended sharply lower. The Dow Jones Industrial Average fell -1.43% by more than 500 points and the S&P 500 by 1.9%. However, oil futures rose +4.47% to a seven-year high. A round of buying stakes in traditional safe-haven assets pushed government bond yields down. Gold, the US dollar and the Japanese yen have risen.
Bitcoin reacted with a 4% drop in the past 24 hours and is trading again at $42K. BNB was down 3%, XRP was down 4.79%, ADA was down 5.91% and SOL was down 7.51% in the last 24 hours. Ethereum dropped below 3K and is currently trading at USD 2930.
It is unclear whether a war will break out in the region. In any case, the tensions have led investors to look for store-of-value assets.
Peter Schiff also spoke out on the matter. He said that only gold is a safe haven. He says anyone who buys US Treasuries will see their assets evaporate if inflation rises further.
Investors buying U.S. Treasuries as a safe-haven given heightened geopolitical risk are making a big mistake. #Inflation pressures will actually intensify if #Russia invades the #Ukrainewhich will further erode the value of bonds. The real safe haven from both threats is #gold!
— Peter Schiff (@PeterSchiff) February 11, 2022
Leaving Bitcoin out as a safe haven doesn’t seem appropriate. At the start of the pandemic, there was a significant drop in the price of Bitcoin, but it quickly recovered, eventually surpassing gold, the dollar and other assets.
The market is closely following the new Bitcoin market decline. However, it could also just be a simple price correction after days of bullishness.
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