The safe-haven nature of cryptocurrencies may not be sustainable under the Russia-Ukraine conflict

Bitcoin prices surged 20% earlier last week, briefly topping $45,000, amid speculation that sanctions and a plunging ruble would force Russians to buy cryptocurrencies such as bitcoin.

However, as of press time, the price of Bitcoin has dropped to $38,508.90 per piece. Today, the sustainability of cryptocurrencies as a safe-haven asset has been put to the test.

It is reported that Bitcoin was born after the global financial crisis and is an alternative currency outside the traditional monetary system. Since then, it has been promoted as a means of exchange and store of value outside of government control. Today, Bitcoin has become the main means of speculation, and it was not until the Russian-Ukrainian conflict that discussions of its safe-haven properties resumed.

As Figure 1 shows, the 60-day correlation between Bitcoin and the S&P 500 rose to 0.6 following the outbreak of the Russia-Ukraine conflict, although the correlation between Bitcoin and the S&P 500 is now down from its highest level about a month ago Pulled back, but remains elevated relative to historical levels.

Bitcoin prices surged 20% earlier last week, briefly topping $45,000, amid speculation that sanctions and a plunging ruble would force Russians to buy cryptocurrencies such as bitcoin.

However, FTX CEO Sam Bankman-Fried and the exchange’s U.S. president Brett Harrison said that using cryptocurrencies to bypass sanctions is not that easy.

Furthermore, the data seems to bear this out. On March 3, total ruble-denominated cryptocurrency transactions amounted to just $34.1 million, which is significantly lower than the recent high of $70.7 million on February 24, and $158 million on May 20, 2021, according to Chainalysis data. record level.