‘Disbelief’ as cryptocurrency recovers despite ongoing Ukraine-Russian conflict

Bitcoin has seemingly risen from the dead in a move that has experts scratching their heads as the Russian invasion of Ukraine rages on.

Bitcoin has seemingly risen from the dead in a move that has experts scratching their heads as the war rages on.

Cryptocurrency naysayers have been left in “disbelief” after the digital coins surged in the space of just 24 hours, all but covering the ground it had lost after markets plunged off the news that Russia had invaded Ukraine.

Last Thursday, when geopolitical tensions reached breaking point in eastern Europe, bitcoin shed 10 per cent of its value.

Since then, the top-ranked cryptocurrency was struggling to gain a foothold. At one point it was as low as $US34,000 ($A46,800).

But overnight, it gained back its lost value and then a little bit more.

At the time of writing, bitcoin was on the up by 11 per cent, boasting a 24-hour high of US$41,993 ($A57,817).

Other prominent coins were also on a winning streak: Solana was up by nearly 16 per cent, terra had gained 14 per cent, ethereum posted 8 per cent gains and both ripple XRP and BNB had risen by 7 per cent each.

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Bitcoin’s one-day spike in price has defied expectations.

Tony Sycamore, APAC market analyst at City Index, said what we were witnessing could point towards a “Lazarus-like recovery under way” in the cryptocurrency space, referencing the Biblical figure who rose from the dead.

As bitcoin started to stabilise, CryptoPotato reported that the blockchain was “leaving bears in disbelief”.

Australian analysis and comparison site Finder was also buoyed by the news.

“BTC’s ongoing price momentum has seen the digital currency wipe out its monthly losses completely,” Finder noted.

The world’s number one blockchain has achieved “a relatively high level of financial stability over the course of the last 48 hours,” it also said.

But just as its drop in price was attributed to Russia’s invasion of Ukraine, so was the cryptocurrency’s resurrection.

Damage after recent shelling in the separatist-controlled city of Donetsk, Ukraine. Picture: Alexander Ermochenko/Reuters

A local resident walks next to her damaged house in Donetsk, Ukraine. Picture: Alexander Ermochenko/Reuters

“Sanctions imposed by the west on Russia over the weekend have prompted strong inflows into bitcoin and other digital assets as Russians look for ways to get their money out of the country, and their rapidly tumbling currency,” Mr Sycamore said.

Crypto data firm Kaiko said bitcoin trading volumes in Russia have reached levels not seen since May last year.

Exchanges that use roubles saw volumes rise by 121 per cent compared to last week, according to CoinShares data, as reported by Bloomberg.

Ukraine’s vice Prime Minister Mykhailo Fedorov implored cryptocurrency exchanges to block the transactions as a way to economically cripple his enemy.

“I’m asking all major crypto exchanges to block addresses of Russian users,” he wrote.

“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.”

I'm asking all major crypto exchanges to block addresses of Russian users.

It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users.

— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022

Cryptocurrency exchange Binance, which last month joined the Association of Banks of Russia to provide regulatory input on blockchains, understandably has a large amount of Russian transactions going through it.

Earlier on Tuesday, it made the unprecedented move of blocking the accounts of some of its Russian users.

Russian clients targeted by sanctions will be frozen out of its system, Binance said, but it will not interfere with the accounts of others despite Ukraine’s call for blocking all Russian users.

“Crypto is meant to provide greater financial freedom for people across the globe,” Binance said.

“To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.

“However, we are taking the steps necessary to ensure we take action against those that have had sanctions levied against them while minimising impact to innocent users.”

Western nations including US, Britain, Europe and Canada slapped Russia with new sanctions on the weekend, including blocking certain lenders’ access to the SWIFT international payment system.