With Russia invading Ukraine and setting the global economy to a spin, the world dynamics are changing at a major pace than expected. This has created ripples in the world economy. Amidst these events, cryptocurrencies started to grow as a powerful investment vehicle. These altering dynamics have brought out the best of the cryptocurrencies.
Starting from January to March 2022 there have been major changes happening in the cryptocurrency sector, with news about Bitcoin and cryptocurrency market crash making headlines here are the 4 latest Cryptocurrency updates as of March 2022.
Cryptocurrency as a medium to generate funds
Initially, when cryptocurrencies were launched, they were criticized for their higher volatility. Decentralized Finance systems were also a topic of debate across multiple economic platforms. Some people were against it and some supported it. But later on, cryptocurrencies gained an enormous fan following and grew in market cap, attracting huge investment. However, the Russia Ukraine crisis pushed the cryptocurrencies to the main stage.
Ukraine started to generate funds through cryptocurrencies. The Government of Ukraine officially tweeted their crypto wallets and requested donations from the world. Ukraine received a total of 100 million dollars in cryptocurrency donations. People throughout the world started to donate to Ukraine through Bitcoins, Ethereum, and other forms of cryptocurrencies.
Ukraine’s deputy minister of digital transformation – Alex Bornyakov said that Ukraine received close to 100 million dollars out of its 60 million in a primary fund managed by the Ukrainian cryptocurrency exchange kuna.
The decentralized nature of cryptocurrencies has made them a crucial asset during emergencies like a war that has placed a threat on Ukrainian banks. Most of these donations are used to purchase military gears like vests, goggles, and battlefield medical supplies. The cryptocurrency’s liquidity has helped the ukranian government to easily cash in on the digital currencies.
After receiving huge donations through cryptocurrency, the Ukrainian government has legalized it. From March 18, Cryptopcurrencies are legal in ukraine and the president have also passed a bill. Apart from other cryptocurrencies in Ukraine, Bitcoins became popular and one of the best cryptocurrency to invest in 2022. I recommend you to have a look at this video from BITCOIN magazine. Natalie Brunel has explained everything regarding the bill signed by Zeldnsky and the donations received.
Cryptocurrency as a tool to resolve financial struggles
Cryptocurrencies have literally saved Ukraine and provided relief from the geopolitical pressure. On The other hand, Russia is suspected of using cryptocurrency as a tool to avoid sanctions. Some of the economists and crypto analyst suspect that Russia can evade the sanctions passed on it using cryptocurrencies.
The US government democrats and treasury department are observing the crypto sector very closely. The worlds first crypto Bill was passed by the US government. The bill has clearly stated that cryptocurrencies will be researched and thoroughly analyzed by the federal reserve. The US government is making sure that the sanctions cannot be evaded using cryptocurrency.
Practically speaking, Blockchain technology is public transparent and permanent unit. In this case a wallet is linked to one entity or a person. It prevents any form of sanction evasion. Private firms and law enforcement agencies can identify and eliminate the illicit use of cryptocurrencies.
Nearly 0.15% of all crypto transactions by volume for the illicit purpose in the last year- chain analysis.
Despite Russian civilians great interest in cryptocurrencies. Crypto exchange rules among Russian cryptocurrencies are much more relaxed. With tightening enforcements on sanctions occurring on both individuals and firms Cryptocurrencies have proved to be a way to safeguard their wealth.
US sanctions passed over Russia has alerted crypto exchanges like CoinBase to start screening the transactions,the customers and blocking the transactions from individuals or entities as per the law. More than 24000 IP addresses have been blocked by CoinBase.
Total crypto values on the worldwide exchanges averaged around 24 billion by February. Russians are cashing out their cryptocurrencies through UAE-based crypto exchanges and investing in UAE property to avoid infringement of their accounts. In many ways, cryptocurrencies are helping Russian civilians to safeguard their wealth.
Can Cryptocurrency be used to evade sanctions?
Russia to an extents can reduce the impact of sanctions using cryptocurrencies. In case of sanctions, the government passes on a list of people and businesses the citizens should avoid. So the Banks and other financial institutions helps to enforce this. They will block the transactions with the entities and report their behavior to the authorities. But cryptocurrency can provide an alternative way by avoiding the central banks.
When compared to banks, crypto exchanges don’t completely adhere to KYC processes. Since Russia is the power capital of the world and has multiple cryptocurrency tools and mining stations. It can easily find a way to trade without dollar interference.
With the Russian government planning to launch its Central Bank digital currency called the Digital Ruble, it can be involved in trade directly with other countries willing to accept this form of currency.
If you look at history, other countries like Iran and North Korea have used digital currencies to reduce the impact of US sanctions. North Korea is accused of stealing cryptocurrencies using Ransomware for funding nuclear programs. You can check out this article on five major cryptocurrency thefts. This contains details of some of the thefts and hacks in the crypto sector.
With other countries like China already launching their digital currencies, Russia can partner with these countries and continue trading using the digital ruble. It is pretty clear that cryptocurrency to an extent can provides relief from US sanctions on Russia. However avoiding the sanctions entirely through cryptocurrency is not possible.
In an analysis, in 2021, about 70% of global ransomware revenue sums up to 400 million dollars worth of cryptocurrency are linked with the Russian premises.Also, Illicit funds have flowed into Russia through the dark web marketplace called Hydra. Hydra has have handled more than 1 billion in sales. It allows sellers to liquidate cryptocurrency through regional exchanges. It acts as an impediment for researchers to track the money.
Another practical reason why cryptocurrency is not apt for evading sanctions is because some of the cryptocurrency exchanges permit the user after completing the KYC process. Cryptocurrency exchanges in the United States can effectively identify the crypto-assets and their owner. It can infringe the accounts along with the assets.
Bitcoins and Cryptocurrency prices increase Amid the Crisis
We have seen how Bitcoins and other cryptocurrencies have altered the global economy during the Russia Ukraine crisis. It has been a relief for civilians and government officials in Russia and Ukraine. All these aspects led to a major price increase in Bitcoins.
As soon as the Russia -Ukraine invasion occurred, Bitcoin’s value dropped to $34904. Not just Bitcoins but also other cryptocurrencies have drastically faced a price drop. The better part is, the crypto market has revived to its original glory. Bitcoin price has increased to $47,340 as of March 31, 2022.
The Russia Ukraine war is one of the turning point events for the crypto industry – Dileep Seinberg, founder and CEO of thinkchain
The Russian ruble sliding down and Bitcoin bouncing back on its feet have made crypto enthusiasts and people invest more in these digital assets. Tether is a stable coin modeled to have a stable value. It was traded in 3.3 billion ruble denomination in March. It demonstrates the urgency of people focusing on converting savings to cryptocurrencies in Russia. As most equity markets and stock markets facing a major low, cryptocurrencies have started trading in green. Bitcoin, Ethereum, and USDT tether saw a price rise within a short period.
Is cryptocurrency going to crash in April 2022?
With the financial year ending the Bitcoin prices were trading around $43460.00 on Wednesday. The fuel prices rise, and overall energy prices are rising at a greater level along with inflation. However, having a solid performance in the past week Bitcoin prices are trading still in the red due to a bullish track. Cryptocurrency like Ethereum has increased by 24% since the 14th of March. Some crypto analysts predict that cryptocurrency prices may drop in the coming months.
Signs that denote cryptocurrency is crashing
A negative flow among the digital assets was evident in the last month. Most investors worldwide are offloading popular assets like Bitcoins from their portfolios. More than $101 million have been liquidated from Bitcoin. Ethereum also faced a mega cash outflow of $151 million. The falling consumer sentiment is a negative sign for cryptocurrency. This video is from Nick of Jupiter, a YouTube channel dedicated to crypto trading. Here Nick explains the crypto market crash on the daily round-up.
We all know that cryptocurrencies like Bitcoins and Ethereum are highly volatile. However, with the undergoing Bitcoin 2022 the world’s largest Bitcoin conference in Miami Beach Florida, there are chances for the prices to surge. 35,000 people are attending this Bitcoin conference. It is live-streamed for 7 million viewers worldwide. So will the cryptocurrency prices increase after the conference? only time can predict
Conclusion
Cryptocurrencies have made clear that they are here to stay and are seen as an alternative option then the Fiat currency. With cryptocurrencies enormous growth, many countries are planning to launch their digital currency and looking forward to regulating this sector.
It is safe to invest only 5% of your portfolio in cryptocurrencies. You can look at the Top 5 cryptocurrencies to invest March 2022. These five cryptocurrencies have fared very well in this crisis. This article is just information, not a suggestion to invest in cryptocurrencies.
With predictions of a Bitcoin crash and the mega Bitcoin conference occurring in the Miami Beach convention center, it is tough to predict whether the crash will occur or not. However the cryptocurrencies have proved that they have many applications, especially during the emergency situations.