Bitcoin appears to be performing more like a tech stock than a safe haven right now — further diminishing the narrative that BTC is a form of digital gold.
Bitcoin plunged 12% on Thursday as Russia launched an invasion of Ukraine — with explosions heard in multiple cities, and thousands attempting to flee the capital.
CoinMarketCap data shows the world's biggest cryptocurrency fell to lows of $34,459.22 — significantly below the high point of $39,122.39 that was recorded on Wednesday.
Smaller cryptocurrencies suffered even larger double-digit losses. Ether, Binance Coin and XRP are all down by about 13% over 24 hours. Other altcoins — Cardano, Avalanche, Dogecoin and Polkadot among them — have fallen 17%.
Global stock markets have also been sinking — with the tech-heavy Nasdaq 100 now on the brink of officially entering a bear market. On the flipside, the price of oil has surged — with gold outperforming as investors seek safety.
There are a few takeaways here. The first is that Bitcoin appears to be performing more like a tech stock than a safe haven right now — further diminishing the narrative that BTC is a form of digital gold.
A surge in oil prices could also contribute to concerns over spiraling inflation, not least because it could translate to higher energy bills and more pain at the petrol pumps. However, it's unclear whether the ever-worsening crisis would prompt the Federal Reserve to delay interest rate rises that had been planned to commence next month.
Shrinking Market Cap
Almost $200 billion has been lost from the total market capitalization of all cryptocurrencies over the past 24 hours — shrinking to $1.57 billion. Bitcoin's dominance has been fairly static, and continues to hover around 42%.
There are a few levels worth watching at this juncture. The first lies around $33,184.06 — a price that was last seen in January 2022. Bitcoin hasn't breached this level since the summer of 2021.
Beyond that, $29,000 will prove crucial. BTC successfully bounced back from this point last July — and even managed to surge to a new all-time high just four months later. But analysts fear that losing support here would drag Bitcoin back to the low $20,000s at the very least — potentially fulfilling the prophecy that a decline of 80% follows a bull market.
Ethereum co-founder Vitalik Buterin, who was born in Russia, wrote a tweet that condemned Vladimir Putin just minutes after the "special military operation" was announced by the Kremlin. In Russian, he said:
"Very upset by Putin's decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead. This is a crime against the Ukrainian and Russian people. I want to wish everyone security, although I know that there will be no security. Glory to Ukraine."
And in a subsequent tweet, he added:
"Reminder: Ethereum is neutral, but I am not."
NATO is urging Russia to withdraw its troops from Ukraine and choose diplomacy at this critical juncture — but few know what Putin is planning next. As a result of this, further turbulence in the global markets is not just to be expected, but is practically guaranteed.