A new way out for Russia? Bitcoin's market cap surged 20% in the past two days

Digital assets are once again seen as a safe-haven asset and a potential tool for evading sanctions amid the intensifying conflict between Russia and Ukraine. Bitcoin extended its two-day rally and led the cryptocurrency higher.

Bitcoin rose 8% to $44,964 in New York trading on Tuesday, after the gains over the past two sessions briefly added 20% to its market value, pushing its total market cap above $840 billion again.

Other cryptocurrencies are also rising, with Ethereum surpassing $3,000. It also broke above the average price of the past 50 days, signaling further price gains.

Cryptocurrencies seen as safe-haven assets

Market analysts said the stunning breakthrough could be attributed to the idea that cryptocurrencies could act as a safe-haven asset as the war in Ukraine intensifies.

This view holds that the appeal of cryptocurrencies is that they are not controlled by governments and therefore not subject to any actions by governments.

FRNT Financial Inc. Stéphane Ouellette, CEO of Bitcoin, said that Bitcoin "has gold-like properties in that holding it allows direct control over assets without going through governments and banks." "In a time of banking instability in a region, it's clear that This is happening in Europe,

With people diversifying their investments outside the banking system, it makes sense that some money would flow into Bitcoin. ” He added that speculators can get ahead and push the price of bitcoin higher.

"Bitcoin has surged as it appears to have slightly regained its safe-haven status amid continued escalating conflict in Russia and Ukraine," XTB Market analyst Walid Koudmani said on Tuesday.

A new way out for Russia? Bitcoin's market cap surged 20% in the past two days

Bitcoin emerges as a potential tool for evading sanctions

Global markets suffered a fresh round of turmoil on Tuesday as the war in Ukraine intensified and sanctions against Russia intensified in Europe and the United States.

Nicholas Colas, co-founder of DataTrek Research, said the bitcoin rally has something to do with investors using these cryptoassets as a potential solution to sanctions, “while also proving that virtual currencies are a viable alternative to fiat currencies such as the Russian ruble.”

European stocks fell along with U.S. stocks, with the S&P 500 falling for a second day. Wall Street's fear gauge, the Volatility Index (VIX), also surged.

Many analysts have long believed that Bitcoin could be a useful asset during geopolitical turmoil. Adam Farthing, chief risk officer at crypto trading firm B2C2 Japan, said bitcoin could “decouple from risk” and begin to serve as a hedge against geopolitical instability and inflation.

Other factors may also have propelled Bitcoin higher.