We all know that Bitcoin fall under high risk or volatile asset , which means it's price movement are mostly driven by speculative overreactions or anticipation feelings in crypto markets.
$BTC prices react swiftly to political and economic events, resulting in significantly higher volatility compared to other investment instruments like Gold and the US dollar.
Even though there are many concepts that can cause a spike or decline in Bitcoin price,
Today I would like to talk about war as a concept especially the russian and Ukraine war which played a vital role in the price movement of bitcoin.
At first when Russia invaded Ukraine in February 2022, we experienced a decline in bitcoin price from around $45,000 to $35,000 within days. This is as a result of many investors diverting to a more safer asset like Gold and US dollar. Due to market uncertainty and fear of the war getting escalated , there was a huge sell off in both stocks and cryptocurrency.
As the war keeps proceeding , a sudden huge demand for bitcoin in both Ukraine and Russia occured which made an impact on Bitcoin Adoption
Firstly, The Ukrainian government and NGOs raised over $100 million in crypto donations, including Bitcoin, Ethereum and stablecoins to support humanitarian and military efforts. This made Ukraine legalize Crypto in March 2022
Secondly, In Russia cryptocurrency trading volume increased as many citizens see Bitcoin as a solution to bypass economic sanctions and banking restrictions.
As a result of this adoption from the countries bitcoin price surged from $35,000 in late February to nearly $48,000 by the end of March 2022.
After the short term gains bitcoin experienced a sharp decline in the second half of 2022, reaching a low of $15,500 in November which was as a result of raised interest rates by the central bank and US Federal reserve to help reduce market liquidity.
The question now is that can we consider Bitcoin as a Safe-Haven Asset like Gold?
My personal opinion as a @DAO Labs #SocialMining writer; With Bitcoin ability to act as a risk asset and also a Decentralized financial alternative, I think it would be more accurate to evaluate Bitcoin not as 'safe haven’ asset like Gold but as a unique asset with its own characteristics and can behave differently from other traditional assets. This perspective will help create more realistic expectations and make more informed investment decisions.
