Cryptocurrency has jumped above $40,000 as Russians turn towards cryptocurrency after the Ruble sank to a historic low report edition.cnn.com. New sanctions have hit Moscow, and the cryptocurrency route is the most viable option to circumvent these sanctions.
The Latest Developments Have Also Buoyed Other Cryptocurrencies.
Other cryptocurrencies moved higher, too. Ethereum surged by 10% on Tuesday to reach $2,878. Dogecoin values also increased nearly 6% to about 13 cents apiece. The surge of cryptocurrencies gives strength to the theory that while other fiat currencies are affected by geopolitical events, cryptocurrencies are insulated from such factors. Virtual currencies based on Blockchain technology was once considered risky, have become the latest potent tool for countries sanctioned globally to bypass the sanctions.
U.S. An Allies Impose Stringent Sanctions
The U.S. and its allies have brought in even more severe sanctions and have unplugged the Russian Financial Platforms from SWIFT, the messaging system used for trillions of dollars worth of transactions worldwide. According to experts, this step has been initiated to prevent Russian banks from using their international reserves to circumvent the sanctions.
Unofficial estimates peg Russian offshore investments to the tune of $300 billion. According to a Credit Suisse report reported by Bloomberg, the money is enough to disrupt money markets if it’s frozen by sanctions or moved suddenly to avoid them.
The crypto sector led by leaders Bitcoin (BTC) and Ethereum(ETH) has made some recovers along with the stock markets, which were shell-shocked after the Russian invasion of Ukraine and the U.S. and allies-led sanctions. However, the recovery could be short-lived since other factors like surging inflation and commodity prices could trigger another round of volatility in cryptocurrencies.
The recovery of Bitcoin, Ethereum, and cryptocurrency is feared to be short-lived, and fears persist that it will crash due to other factors. Morch feels that unless Bitcoin maintains above the psychological barrier of $40,000, it could again go back to historic lows and the $30,000 levels are a distinct possibility.