The Russia-Ukraine crisis is crushing U.S. stocks… However, it’s also creating an opportunity for the cryptocurrency market…
The U.S. market reported its second weekly loss in a row due to escalating tensions between Russia, Ukraine, and western countries.
The S&P 500, Dow Jones, Nasdaq Composite, and Russell 2000 all declined by as much as 1.1% on February 18 as a result. And that was before President Biden announced that he thinks it's inevitable Putin will invade Kyiv…
Meanwhile, the CBOE’s VIX volatility index, which tracks anticipated swings within the S&P 500 – hit a reading of 30. This indicated that market stress continued to increase amid ongoing geopolitical uncertainty.
That’s because Moscow-backed separatists in eastern Ukraine announced plans to evacuate to Russia. Yet, Russia’s comments that it plans for nuclear drills amid ongoing talks with the U.S. and western powers also spooked investors.
If Russia ultimately commits to invading Ukraine, the U.S., European Union, and other allies noted they would place heavy economic sanctions on Russia.
In this instance, oil prices would surge higher, adding to growing inflationary pressures worldwide – as Russia is one of the largest crude producers and exporters.
It could also potentially hurt Russia’s economy and stock market. However, that’s potentially why Russia signaled it may be banking on Bitcoin to avoid economic woes.
Earlier this month, a Chinese news service reported that Russian President Vladimir Putin sent a letter to China that detailed ongoing trade between the two as well as the possible adoption of Bitcoin to avoid western sanctions.
While Russia’s central bank had previously discussed banning the cryptocurrency, Putin pushed back on the idea. That’s because Putin seems to see the value that Bitcoin can offer in its ability to safely generate cash that can’t be tracked or controlled by its opposition.
And now that the Russian and Ukrainian governments have approved the legalization of cryptocurrencies, Russia could ultimately continue to do international business – regardless of growing geopolitical tensions.
So, even though the crypto market is seeing some volatility, it may present investors an opportunity to buy into Bitcoin at a cheaper price. In turn, it could spur profits over the long term… as any attempt by global governments to ban Bitcoin would be like banning the internet… making it an impossible task.
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