The ongoing war between Russia and Ukraine has led to massive sell-offs in the cryptocurrency market, which has plummeted nearly 10 per cent over the last 24 hours. Most leading cryptocurrencies, barring stablecoins, have seen double-digit dips. Data shows that over $200 billion has been liquidated since Russia and its President Vladimir Putin announced a “special military operation” against Ukraine.
How Major Crypto Coins Reacted?
On Thursday, Bitcoin (BTC) was down by 8.12 per cent in the last 24 hours, while it was trading at $35,082.66 at 5:00 pm IST. Ethereum (ETH) was trading at $2,350.25, with a fall of 13.28 per cent, while Binance Coin (BNB) was trailing by 12.34 per cent over the same period, was trading at $332.97. Solana (SOL) was down by 10.44 per cent to $80.43 and Cardano (ADA) was down by 18.49 per cent to $0.7544.
Among the major meme coins, Dogecoin was down by 17.90 per cent, and was trading at $0.1107 at 5:00 pm IST. Rival Shiba Inu was down by 16.92 per cent and was trading at $0.00002135. Dogelon Mars was down by 20.52 per cent and was trading at $0.0000006486, while Samoyedcoin was trading at $0.01839, recording a fall of 7.88 per cent in the last 24 hours.
Crash Expected
The crypto asset market is no different from other investments. “What we are seeing now is a speculative reaction to what’s happening between Russia and Ukraine. History shows us that this, most often, is a short-term phenomenon and markets tend to rebound once the initial shock wears off,” says Avinash Shekhar, CEO, ZebPay.
Crises such as wars usually lead to a crash in the investment market, says Bhagaban Behera, CEO and co-Founder of Defy, a social crypto exchange. A crisis leads to uncertainty and panic. People fear that governments and the banking systems may collapse, leading to people losing wealth. “A situation like war also leads to people losing jobs and their income. All of this leads to people stocking up their wealth with themselves and they want less of their wealth invested in markets,” he said.
Should Investors Move to Stablecoins?
Despite major crypto coins’ fall, stable coins have shown minimal change in the last 24 hours. Some crypto experts believe investments should be in stable coins like USDT or PAXG, which are based on the value of gold. “Some investors react to volatility by shifting their investments to less volatile financial instruments. No doubt, investing in gold is one way to hedge risk from volatility, but one can also achieve the same result by investing in stablecoins like USDT or PAXG which are pegged to the value of gold,” says Shekhar.
Stablecoins may gain popularity amidst such a fall in the crypto market. “Everyone believed that crypto was a new asset class, but the Ukraine crisis has proved them wrong, and the crypto market continues to bleed. Because gold is up and stablecoins are stable, it is safe to say that 'Digital Assets' are still not considered as a 'store of value' or 'asset' but more of the 'equities of blockchain’,” says Gaurav Mehta, founder of Catax, an online crypto tax and auditing platform.
What Should Be Your Crypto Investment Strategy?
Observe, don’t panic, think long-term and stay invested—that’s what experts are advising. Invest in those assets that will hold value even after the crisis passes. “Investors who buy during market dips see significantly higher returns than those who invest during optimistic periods. So, if one has the risk appetite and financial means, now is a great time to invest in cryptos,” says Shekhar.
