The crypto market is seeing another crash just days after trying to correct the previous correction. The leading cryptocurrency, Bitcoin, has dropped 12% in the last 7 days and is now struggling below $37,150.
Ethereum was down 6% over the day and the majority of the top ten largest cryptocurrencies like Cardano (ADA) XRP and Solana (SOL) have plummeted by about 4% today.
Some like Shiba Inu (SHIB), Chainlink (LINK), Avalanche (AVAX), Cosmos (ATOM), and Polygon (MATIC) saw a double-digit drop as the market cap dropped to $1.67 trillion.
Bitcoin price drop and Russia-Ukraine crisis
One of the main reasons attributing to the Bitcoin nosedive is the geopolitical tensions arising from the Russia Ukraine crisis.
Yesterday Russia announced that it recognizes two separate Eastern Ukrainian regions, Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) as independent states. After the announcement, Russia immediately started moving its troops into the DNR and LNR region.
After Putin’s statement, the Moscow Exchange (MOEX) equity index dropped by about 10.5%, Nasdaq futures lost 2.2%, S&P 500 fell by 1.5%, and the Russian rouble dipped to an 18-month low against the US dollar. It caused the biggest drop in the Russian stock since 2008 according to Telegraph.
Last week, Ukraine, which is the country with the highest level of crypto adoption, passed new legislation (Virtual Assets bill) to legalize cryptocurrencies. And following the recent developments, the Ukrainian population, most of whom embrace cryptocurrencies, especially Bitcoin will have to first contend with the geopolitical circumstances.
On Tuesday Morning the EU bloc’s foreign chief, Josep Borrell stated:
‘’Markets may see more gloom in the coming days. The European Union is set to impose heavy sanctions against Russia over its recognition of Ukrainian separatist regions and further deployment of troops on Ukrainian territory.’’
Ethereum co-founder, Vitalik Buterin, had also warned earlier this month that:
‘’Russia’s invasion of Ukraine will not only harm the two countries but the whole of humanity.’’