Bitcoin has overtaken Russia’s ruble in terms of total value as the bitcoin price surges just as the ruble goes into freefall.
The bitcoin price has added 20% since dropping to lows of under $35,000 per bitcoin last week. Meanwhile, the ruble has crashed almost 30% following new Western sanctions being put on Russia over the weekend.
Data from FiatMarketCap has put bitcoin ahead of Russia’s ruble for the first time as investors bail out of Russian assets in the face of overwhelming global financial sanctions.
After it was announced Russia would be kicked off the SWIFT interbank messaging service over the weekend and its central bank would have its assets seized, Russia more than doubled its interest rate to 20% in a bid to shore up the ruble.
“Russia is entering a full financial crisis,” Bilal Hafeez, the chief executive of financial analysis platform Macro Hive, said in emailed comments. “The ruble is collapsing.”
Meanwhile, bitcoin trading volumes using the ruble have surged to the highest level since May, according to crypto data company Kaiko it was reported by Bloomberg.
“The trend follows a wave of sanctions against Russia, which has disrupted forex markets and caused the ruble to sink to record lows against the dollar,” Clara Medalie, head of research at Kaiko, told the newswire.
“Russia has been mixed on cryptocurrency but the above actions could see Russia embrace crypto to evade sanctions,” added Hafeez. “This could accelerate western regulation of crypto in response to this possibility.”
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Elsewhere, the bitcoin price has been given a boost due to Ukraine’s viral appeal for bitcoin and crypto donations. It’s thought donations to the country have now passed $20 million, according to on-chain data reviewed by blockchain analysis company Elliptic.
“Putin’s order to put the Russian nuclear deterrence force on high alert shook the crypto market on Sunday, but some news regarding large crypto donations to the Ukrainian forces and the rising demand for crypto in Ukraine are being welcomed by the market,” Yuya Hasegawa, crypto market analyst at Japan-based bitcoin and crypto exchange Bitbank, said in an emailed note, adding reports of Russian bank runs are “reminiscent of the Cyprus shock back in 2013, which sent the price of bitcoin significantly higher.”
Hasegawa warned that if peace talks between Russia and Ukraine fail the bitcoin price “could extend the Sunday loss and break below $37,000.”