The war between Russia and Ukraine has begun. With several financial markets in a frenzy, there is increased fluctuation. Investors are worried about where their digital currency holdings will reach amidst this Russia Ukraine crisis. Is crypto affected by this war? Let us have a look at the Russia Ukraine crisis update on the cryptocurrency space.
The values of crypto have been dropping within the past 24 hours and there are chances that the situation can turn much worse. Some holders have already panicked and sold their assets. Now it will be thrilling to see how BTC and other crypto tokens rebound after the Russia Ukraine conflict 2022.
How Will Crypto React To The Russia Ukraine Crisis?
Now looking at the market today, what is increasing in value? Is it Bitcoin? No, it is not. Gold, silver, oil, precious metals, commodities, these are going to rise in value because of supply chains being disrupted. Gold is where people flock to in times of uncertainty and fear. So it is no surprise why gold is rising in value. So as much as the prospect of Bitcoin is appreciated in cross border payments, and many other areas, its rate of volatility cannot be avoided. So for that reason, we are going to point out a couple of things.
What Happens To BTC During Wars?
There has not been a war of this magnitude where BTC and other digital currencies have been traded this heavily other than the recent Afghanistan war. That war documentary lasted from 2001 to 2021, where there was a peak of 110,000 soldiers in Afghanistan in 2011, as per the history. With Bitcoin being formed in 2009, its value has increased by more than 9.8 million percent up until the end of 2021. So, across the span of the Afghanistan war, BTC essentially skyrocketed.
Bitcoin Vs Gold Performance In This War
On 24.02.2022 war was announced and Bitcoin was down by 5% for the day. Even if it makes a recovery, there is nothing to rejoice in as there are more uncertainties ahead. And in general, if we compare this graph to gold, then it is laughable. Bitcoin has been on a downtrend ever since November and Gold has been in an uptrend ever since December and it is presently up to $1930, as per reports. So as a crypto trader you do have some choices on how you can hedge yourself. One among them is to short the market using margins or features so that you can short tokens that have a position on but if the traders do not have the ability to short the market then the next best thing that can be done is to check out the pax gold.
Pax gold is a cryptocurrency that is primarily gold but it lives on the blockchain. So the next thing about pax gold is that it is inverse to BTC. So if BTC decreases pax gold will increase. And this has happened in the November tenure when BTC was down, pax gold was up by 100%. So it is no surprise that pax gold had a great spike right here in trading volume.
How To Hedge Against BTC During Russia Ukraine Crisis?
If you are a trader and you wish to hedge your BTC against something, then you can get your pax gold on Binance, Kucoin, and Kraken. The notion about purchasing pax gold with BTC is that as long as the value of Bitcoin falls and the value of gold increases you will actually be hedged nicely and end up with more Bitcoin when that trade is being closed.
If gold really does break out and it increases this year, not just up to $2000 but if it moves up to $3000 this year, which some analysts predict, that would match up really well to that target. Now, one should not expect anything to go up in a straight line, but the longer the Russia Ukraine crisis 2022 drags out and the impact it has on the world and also the world economy, one better believes that we are going to see something similar to this happen.
Concluding Lines: How You Can Protect Your Portfolio During The War?
Bringing all these back to what can be done with the crypto in thus Russia Ukraine crisis summary 2022. There are still opportunities for trading. But it is always advised to protect your portfolio as opportunities for trading will come again. The best thing to do now is getting fearful and not take the chance and risk to interact with the crypto market in this highly fluctuating time. The best thing that can be done now is to be proactive and figure out the ways in which one can react to this market.