After a weekend of selling, Bitcoin rose as high as 9% on the expectation that cryptocurrency would gain in popularity due to Russian sanctions.
TradingView claims that after weeks of weak performance, the cryptocurrency market seems to be recovering. Bitcoin’s price rose by 14.5 percent to just over $43,000 in the week. At the time of publication, the world’s most popular digital currency was trading at roughly $41,200.
Bitcoin Prices Rise as Russian Demand Increases
Marc van der Chijs from First Block Capital believes that Russia fleeing its ruble can explain the spike. This has been exacerbated by severe US and EU sanction.
Van der Chijs claimed Monday that bitcoin trading was possible for as high as $46,000 on certain Russian markets. That’s a $5,000 premium over the US prices.
Van der Chijs said:
“There’s not normally a difference [between the Russian and US price of bitcoin]There are arbitrage opportunities. That seems to indicate that this urge in bitcoin price is because of Russian buying.”
Kaiko, an enterprise market data research firm, noted that Russia’s invasion of Ukraine has resulted in an increase in Bitcoin and stablecoin volume in both nations. Even outlier altcoins and memecoins with more volatility, such as Solana’s SOL, Terra’s LUNA, and Dogecoin, moved higher on Monday.
Russians concerned about the currency’s and banking system’s stability may consider bitcoin as a method to safeguard their savings.
BTC/USD Trades on $41k Source: TradingView.com
Meanwhile, as countries throughout the world piled on sanctions in response to Russia’s invasion of Ukraine, President Vladimir Putin issued countersanctions. Offshore trade saw the Ruble lose a third its value, making it its biggest-ever fall.
“Many Russian citizens and potentially Ukrainian citizens are cut off from being able to move their rubles, dollars, euros or anything else,” said Anastasia Amoroso, chief investment strategist at iCapital.
“We see some evidence of an increase in bitcoin-ruble volume,” Blockchain.com research chief Garrick Hileman noted, cautioning that it was unclear if Monday’s price movements could be completely attributed to such trades.
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Restrict trading on exchanges
Elliptic data suggests the increase in bitcoin may be related to cryptocurrency users converting fiat currency into crypto currencies to give to charities and the Ukrainian military.
This could also be due non-war related issues like a strict schedule, he said.
Russia does not have access to many popular cryptocurrency exchanges such as Coinbase, FTX and others. Many Russians now use Binance to trade between bitcoin and the ruble.
Binance has agreed to block Russian users after Ukraine’s vice prime minister Mykhailo Fedorov demanded it on Sunday.
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Featured image taken from Pixabay. Chart from TradingView.com