GRAPH-Cryptocurrencies in wartime

By Tom Wilson and Elizabeth Howcroft

LONDON, March 4 (Reuters) – Cryptocurrencies have been in the headlines since Russia invaded Ukraine, with bitcoin still volatile in demand in Russia and beyond.

Here are some charts that show how cryptocurrencies fared during the biggest attack on a European country since World War II.


Correlated or not? This has long been the question for bitcoin, with the original cryptocurrency sometimes marching at the pace of equity – and other times not.

Bitcoin initially fell after Russia launched its assault on Ukraine as investors dumped riskier assets, falling as much as 8% on Thursday before recouping the day’s losses. European stocks fell 3.3% while the S&P 500 gained 1.5%.

The paths of bitcoin and stocks have since intertwined again, albeit to different degrees.

Bitcoin jumped 14.5% on its best day in a year on Monday, and is now up 12% since the day before the invasion began on February 24. US equities posted smaller gains, with the S&P 500 rising slightly by 3.3%. The MSCI World Index is down slightly.

“It has again been largely correlated to US equities throughout this crisis,” Joseph Edwards, chief financial strategist at crypto firm Solrise Group, said of bitcoin.


Crypto aficionados see bitcoin as “digital gold,” a handy place to store cash in times of war or disaster. Bitcoin, the argument goes, has a limited supply and operates on a global computer network beyond the reach of governments and is therefore more secure than traditional currencies.

Things are never that simple. Bitcoin’s safe havens are unclear: it often behaves more like risky assets such as stocks.

Investors say that during the war bitcoin’s characteristics fueled demand and helped it outperform other traditional safe havens. Gold is up 2.6% while the 10-year US Treasury yield has fallen 8.7% since last Wednesday.

Still, these measures may do little to settle arguments over bitcoin’s safe-haven benchmarks, analysts said.

“We don’t think BTC is considered a safe haven, and shouldn’t be, but its appeal is instead that it’s a creditless, capped digital bearer asset that happens to be a viable alternative to traditional finance in this current environment,” said Richard Usher of crypto firm BCB Group.

“If the situation continues to worsen and risk markets suffer badly, it will struggle to recover further, but in our view it will still outperform.”


Crypto trading in Russia has soared as the ruble has been battered by Western sanctions that aim to squeeze the Russian economy and separate it from the global financial system.

The Russian currency hit an all-time low of 118.35 to the dollar on Thursday.

Trading volumes between the ruble and major cryptocurrencies reached 15.3 billion rubles ($140.7 million) on Monday, a tripling from the previous week, according to researcher CryptoCompare.

Ruble-denominated trading with Tether — a so-called stablecoin designed to maintain stable value — hit 3.3 billion rubles on Monday, its highest level this year and nearly five times higher than a week earlier, according to the data.

The numbers suggest people are scrambling to secretly save in crypto in Russia.

The war contributed to the narrative that bitcoin “is not just a speculative asset, it’s also a seizure-resistant, policy-agnostic, long-term store of value,” said Noelle Acheson, head of Market Insights at New York. Genesis.

(Reporting by Tom Wilson and Elizabeth Howcroft; editing by Jonathan Oatis)

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