Stock markets in Asia had fallen substantially as the news emerged, prompting Bitcoin to do the same. This may indicate the decoupling between crypto and equities has been short-lived.
Bitcoin plunged 5% in the early hours of Friday morning following a dramatic development in the Ukraine invasion.
The world's biggest cryptocurrency sank to lows of $41,000 after Europe's largest nuclear power plant, which is based in Ukraine, came under heavy shelling from Russian forces.
This subsequently led to a fire in a training building, and sparked fears that one of the site's nuclear reactors was damaged.
Although no increase in radiation levels has been detected, and the U.S. has confirmed that the reactors are now being shut down, Ukrainian President Volodomyr Zelenskyy warned a catastrophe at the power station could lead to "the death of Europe."
Reports of fighting at the Zaporizhzhia nuclear plant in the northeastern city of Energodar spooked the global markets — not least because there were conflicting reports about the severity of the situation.
Some local politicians had claimed that firefighters were being shot at point-blank range by Russian soldiers, and Ukraine foreign minister Dmytro Kuleba even warned:
"If it blows up, it will be 10 times larger than Chernobyl."
A spokesperson for the plant had initially said that the unrest had led to a fire affecting one of its six reactors — and although it was not in operation, it did contain nuclear fuel. These reports later appeared to be untrue, as a building outside of the site's perimeter was affected.
Initial reports that radiation levels around the site were elevated also turned out to be inaccurate, with the International Atomic Energy Agency confirming they were at normal levels.
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Stock markets in Asia had fallen substantially as the news emerged, prompting Bitcoin to do the same.
This may indicate that the decoupling between cryptocurrencies and equities seen on Monday has been short-lived — and BTC may be susceptible to further falls if geopolitical tensions spark sell-offs on Wall Street.
Citigroup analyst Alexander Saunders has also suggested that the 15% surge that Bitcoin enjoyed on Monday may not have been driven by a significant uptick in Russian trading volumes — telling Bloomberg that existing investors may have upped their investment because they expected this would be a side effect of economic sanctions.
BTC is still up by about 8% over the past seven days, and remains comfortably above $40,000 — a price point that had proven exceedingly elusive until recently.