Bitcoin surges 10% after surprise move from Russia and the EU

Surprises came for bitcoin investors from two sides, and the end result has been a stunning rebound for the embattled crypto coin.

The two largest cryptocurrencies have surged in the past week as the sector has been hit with one piece of good news after another.

At time of writing, bitcoin was trading at US$46,000 (A$61,000), the highest it has been since early January.

In the last seven days, bitcoin has risen by nearly 12 per cent.

Ethereum isn’t doing too shabbily either, skyrocketing in price to US$3,200 (A$4200) over the weekend.

Although cryptocurrency initially plunged after Russia invaded Ukraine, it is now riding a wave of new-found confidence because of a number of factors.

Chief among them is that a highly anticipated bill on cryptocurrency from the European Union went relatively soft on the digital assets, buoying the market.

And over the weekend, Russia indicated it was considering accepting bitcoin as payment for its natural resources.

To top that all off, Ethereum launched a successful “merge” to its platform that had investors excited.

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Bitcoin has surged over the last week.

Crypto’s price jump could largely be because of a move from Russia to circumvent international sanctions.

On Sunday, a top Russian government executive said the nation may consider accepting bitcoin as payment for its oil and gas from “friendly” countries, in a bid to avoid severe sanctions which have seen the value of the rouble decimated.

As Western powers keep Russia in a sanction stranglehold over President Vladimir Putin’s invasion of Ukraine, the Kremlin is seeking other ways to get around the economic disaster of its freefalling currency.

Head of Russia’s State Duma committee on energy Pavel Zavalny said in a news conference last week that the country might accept various currencies – such as Turkish lira or Chinese yuan – depending on the buyer’s preference.

He also said that if these countries wanted to switch their payment choice to bitcoin, then Russia would be open to it.

In the 24 hours since the announcement, bitcoin has gone berserk.

Bitcoin in the past 24 hours.

It was a busy time for crypto holders last week, with a major European Union ruling on blockchains also coming to light.

Crypto enthusiasts were waiting with bated breath on the outcome of the EU’s proposed Markets in Crypto-Assets (MiCA) framework.

A last minute addition controversially wanted to limit the use of cryptocurrencies that used proof-of-work over environmental concerns.

Were the proposal to go ahead, it could be bad news for cryptocurrency investors, with the continent looking to “phase out” pre-existing tokens like bitcoin and ethereum already being traded in Europe.

However, at the 11th hour, policy makers scrapped the provision.

The provision was defeated in a close committee vote on March 14 and the last chance to challenge this closed at midnight on Thursday.

Bitcoin has had a phenomenal seven days.

Meanwhile, ethereum rose in value following its launch of the Ethereum “merge” on the Kiln testnet.

CoinTelegraph reported that this “has the [ethereum] community excited”.

Tony Sycamore, APAC market analyst at City Index, attributed the surge in interest mostly to Russia throwing its weight behind cryptocurrency.

“Bitcoin has surged 11.7 per cent over the past week to be trading above US $46,000 for the first time since early January,” he said.

“Bitcoin’s renaissance, supported by a rally in stocks and comments by Pavel Zavalny, head of the Russian State Duma Committee on Energy, who said Russia could accept Bitcoin as payment for the country’s oil and gas resources.

“The remarks were made at the end of a news conference where Zavalny explained countries friendly to Russia could pay for Russian energy imports in Roubles, Yuan and Turkish Lira and added, ‘You can also trade bitcoins.’”