Bitcoin prices plummeted after Russian President Wladimir Putin announced at 5:45 am (23:45 GMT yesterday) that he would carry out a special military operation in Donbass. This is the region of Ukraine where the breakaway cities of the breakaway cities of Donetsk and Lugansk are located. At 5:08 am this Thursday in Brazil, the main cryptocurrency on the market was priced at $35,527, a drop of 6.8% in 24 hours.
The drop was widespread among cryptocurrencies in the seven-day comparisons. Some cryptocurrencies pegged to the dollar were saved a bit, but in one-week price comparisons. The one with the high price was Pax Gold, pegged to gold. This is an asset that investors run to when serious local or global problems arise. The token was priced at $1,972.14, up 3.5% in 7 days and 4.68% in 14 days.
The decline began in mid-afternoon yesterday, as the situation in Ukraine worsened further. And it plummeted at 11:44 pm. In twenty minutes, bitcoin lost about $2,000. It continued to fall to $34,459, albeit at a slower pace. There was a small recovery then. With that, in three months the drop of bitcoin is around 40%.
The war in Ukraine could further worsen the generalized situation of rising inflation in the world, as Ukraine exports, for example, agricultural products. Apart from the fact that geopolitical uncertainties and possible impacts on international transport can weigh on inflation. If that happens, countries can raise interest rates to curb consumption and inflation. This would not be good for cryptocurrencies, which would lose competitiveness with other types of investments.
This is in addition to the fact that the United States (USA) would be about to remove the stimulus to the economy, which emerged with the pandemic. To do so, they would increase the dollar shortage in the market. Which would also have a downward impact on cryptocurrency prices. In fact, that’s what helped a lot to drive their prices down.