Bitcoin and Ethereum snapped six days of losses as investors digest a raft of international sanctions imposed on Russia in retaliation for President Vladimir Putin ordering troops into Ukraine.
Bitcoin was up 3.55% at US$38,151 easing concern the biggest digital token by market value could revisit the 6 month-lows seen in January. Ethereum was 6.21% higher at US$2,682, in tandem with gains in the wider market.
Yesterday the US and its NATO allies fired the first round in a slew of sanctions against Russia aimed at hurting Putin, his closest political associates and the country’s economy.
The UK announced sanctions of its own, with Prime Minister Boris Johnson targeting five Russian banks and three billionaires with assets in the UK.
“However, it seems that the sanctions put in place, as of now, do not seem as hostile as we initially feared,” said Naeem Aslam, market analyst at avatrade.
“With more and more institutional investors entering into the blockchain arena, the correlation between the crypto markets and traditional financial markets is rising,” Aslam added.
Digital tokens have endured a roller-coaster start to 2022. Bitcoin slumped as low as US$35,000 and Ethereum broke below US$2,500 in January amid concerns over the health of the global economy, rising inflation and interest rates and political tensions over Ukraine.
Aslam said Bitcoin is no longer viewed as a “safe haven” as investors continue to turn to the traditional safe havens such as gold to “hedge against equity market uncertainty and rising inflation.”
“Previously, bitcoin was thought to be a digital safe haven asset, protecting the wealth of investors during periods of volatility in global financial markets.”
However crypto currencies are finding some support. Adoption of digital currency and assets by nations and big organisations is usually followed by an upward movement.
South Korea’s top bank is looking to launch a crypto exchange traded fund and JP Morgan’s blockchain chief hinted at future crypto plans.
In other altcoins, BNB was up 5.65% to US$377, Solana was up 8.85% to US$89.51 and Terra was 15.83% to US$56.77.