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The impact of Ukraine-Russia war on crypto assets


Cryptocurrencies have been holding in a very tight range since the Ukraine-Russia war started. However, the global crypto market cap increased 12% from US$1.64 trillion to US$1.83 trillion since 24 February vs. the US S&P 500, up 7% during the same timeframe. Cryptocurrencies have a positive correlation with risk assets like stock markets despite theories of using crypto as safe-haven assets like gold, or “digital gold”. According to CoinMarket Cap, the total volume in Defi is 15% vs. 83% in the stable coins from the last 24-hour volume in the total crypto market, which indicates risk-off prevails in crypto trading at this moment.

There are a few factors to keep crypto markets relatively strong during these uncertain times.

First, the decentralizing functions of the crypto transactions are being used by Russian and Ukrainian owners to hedge losses in the fiat markets. The trading volume in Ukrainian UAH and Russian Rouble has been pumped up since the war started. On the other hand, Ukraine has been receiving crypto donations from other countries during wartime. Ukraine President Volodymyr Zelenskyy signed a bill to legalize the crypto sector due to the mounting donations into the country.

Second, the US regulator is somewhat less restricted on the crypto world by issuing a more supportive rather than disruptive Executive Order upon crypto assets, and it states, “Support Technological Advances and Ensure Responsible Development and Use of Digital Assets”, while raising concerns of illicit financing, consumer protection, and financial stability risks. The Executive Order was rolled out to reinforce the sanctions imposed on Russia, but it is being seen as more encouraging to the digital assets.

Third, crypto assets are being considered a rare asset that can hold up against inflation and economic recession. The crypto enthusiasts, including MicroStrategy CEO Michael Saylor and Tesla CEO Elon Musk, support the view of cryptos’ value in offsetting the spiking inflation caused by the war. Musk says in Twitter that he “still own and won’t sell my bitcoin, Ethereum or doge”.


  • In the near term, MACD signals upside momentum is fading, with a potential bearish break down at the 20-day moving average at US$39,683.
  • Bitcoin shows indecisive moves in a tight range between US$45,000 and US$32,000 in a medium-term. The recent pattern might replicate the period of May – July 2021.
  • The long-term directional bias still points to the upside in the condition to break up at the pivotal resistance at the 100-day moving average at US$47,000.

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