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Russia-Ukraine Crisis: Cryptocurrencies will not be shielded from global volatility, says industry

Investors too are in a wait and watch mode, with most either neutral or bearish on the crypto markets.

February 25, 2022 / 06:09 PM IST
Representative image.

Representative image.

With wars come worries and uncertainty and that is exactly what has been visible in how global markets have been reacting to Russia’s invasion of Ukraine. Stock markets plunged in trade on February 24 after Russian President Vladimir Putin announced a military operation, and cryptocurrencies were not spared from the aftermath.

While Bitcoin, Ethereum, Shiba Inu, Dogecoin, and others recovered after a drop, the crypto industry is ready to face the impact of global jitters and does not believe that tokens will be shielded from this volatility. Bitcoin had dropped to $34,324, the lowest since January 24. It is now trading at above $38,500.

WazirX co-founder and CEO of exchange WazirX said, “We will see the same results on crypto as what is seen in global financial markets, especially Bitcoin. Many have been saying that Bitcoin will gain from this, but I don't believe so. Ultimately, everything is a function of sentiments and war is always a bad sentiment for financial markets.”

For Indian investors, Shetty added, it’s a double whammy. A 30 percent tax rate was announced in the budget on gains from virtual digital assets like cryptos starting FY24, and regulatory clarity is still awaited. War concerns and drop in prices just add to the uncertainty.