• Bitcoin’s price initially plunged as Russian troops invaded Ukraine last week, showing a strong correlation to tech stocks
  • Industry watchers said the price rebound could prove bitcoin is a hedge against inflation or market uncertainty

Bitcoin’s price jump is an indication that the cryptoasset could be transitioning from a risk-on asset to a risk-off asset, according to market participants, though movements in the coming weeks will shed more light on whether or not this is a long-term trend.

The price of a bitcoin was roughly $43,900 at 11:30 am ET, up 7% in the last 24 hours. The price had increased nearly 19% and 15% over the last seven days and 30 days, respectively, data showed at the time.

“I see bitcoin transitioning from a risk-on to risk-off asset, and so far in 2022, the crypto has made good progress on this trajectory,” said Mike McGlone, senior commodity strategist at Bloomberg Intelligence.

Bitcoin’s price initially plummeted last week as Russian troops invaded Ukraine, suggesting a stronger correlation with tech stocks than it does with gold or other safe-haven assets.

But industry watchers said the price rebound could prove a view by some investors that bitcoin remains a hedge against inflation or market uncertainty.

“When freedom and individual liberty are threatened, the price of bitcoin goes up,” said Antoni Trenchev, co-founder and managing partner of Nexo.

“Alongside the overselling in the market over the previous few weeks, a rebound was inevitable.”

Bitcoin is down about 4% year to date, compared to the Nasdaq 100 Index, which has dropped by roughly 13% over that span, McGlone said Tuesday morning. This difference comes despite the fact that bitcoin trades with annual volatility about three times that of the stock index, McGlone explained.

“The Russia invasion of Ukraine may have marked an inflection point in bitcoin’s transition toward global digital collateral in a world going that way,” he told Blockworks. “All risk assets are subject to the ebbing tide of the US stock market this year, facing Fed restraint and the war. Cryptos are among the riskiest assets, but bitcoin is the least risky crypto.”

Countries around the world have issued sanctions aimed at isolating Russia’s economy from the global financial system. President Biden’s latest move freezes Russian assets within the US and prohibits Americans from doing any business with Russia’s central bank, CNBC reported Monday.

Derek Lim, head of crypto insights at Bybit, noted that the crypto market is likely to see lower volatility rates in the near term as economic sanctions against Russia have triggered a decoupling between bitcoin and the equities market.

Russians are now purchasing bitcoin with rubles, which has led to a BTC supply shock that has pushed the price up, he explained. Bitcoin has also gained some legitimacy as a hard asset amid more media coverage about how Ukrainians are turning to crypto to aid them through this crisis.

“Whether this decoupling between BTC and the equities market is a long-term trend or merely a short-term occurrence is still pretty much up in the air,” Lim said. “We will still need to monitor how the crypto market reacts to news in the next few days and weeks.”

Mikkel Mørch, an executive director at crypto hedge fund ARK36, agreed that the latest rally could be significant for the bitcoin use case.

“The biggest crypto asset is now looking at a potential decoupling from risk assets, and it is doing so at a time of unprecedented uncertainty,” he told Blockworks in an email. “Cash used to be king in times of crisis, but now rising inflation levels and broader macroeconomic woes make holding large amounts of cash risk in and of itself.”


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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]