Bitcoin has emerged as the most widely regarded digital token to have entered the mainstream before others and is continually leading the way.
At present, its role in the global financial market is becoming an increasingly evident factor in the ongoing conflict in Eastern Europe involving Russia and Ukraine. Bitcoin’s role in the scheme of things is much clearer. Not only is Bitcoin a mainstay of the economies of both warring countries, but it is also now the principal medium of transactions in the region, albeit unofficially.
However, the world’s leading crypto has attempted to decouple and free itself from the associated pressure; Bitcoin failed to maintain its momentum and has now further declined by up to 20% from its previous high of $45,000.
At the time of writing, Bitcoin trades at $37,980, which shows that its price is down by 4.17%, with a market capitalization of approximately $719 billion. Should the downward correction persist and the BTC not stand at $35,000, it is expected to spiral down further to $30,000.
According to the crypto analytics firm, Santiment, the one thing responsible for Bitcoin’s continued underperformance is physical gold. Gold is the primary beneficiary of the war in Eastern Europe and its profits from the gears of investors and the galloping inflation in the region.
By all accounts, cryptocurrency was not a match for gold as more individuals with huge funds hedged their assets there as it is considered a better store of value.
The crisis has seen gold enjoy a rapid rise by moving up to $2,000 an ounce, a meteoric upward continuation of its high of 19 months ago.
A senior strategist at Bloomberg, Mike McGlone, revealed that he has always maintained a bull case situation for Bitcoin for 2022. But the recent turn of events for the BTC has made McGlone believe that the probability of Bitcoin sliding down to $30,000 is high.
McGlone, however, still has that bullish hope in Bitcoin by stating that Bitcoin will continue to display strength over market equity.
Is Bitcoin Rushed?
As a result of its ongoing military offensive against Ukraine, Russia has been slammed with extreme economic sanctions, leaving the Eastern European superpower reeling from the impact of the economic hammer.
But many industry insiders believe that the market rally experienced last week resulted in most Russians shifting to Bitcoin. The narrative was considered inaccurate after the collapse of the Ruble-controlled cryptocurrency transactions last week.
According to Bitcoin critic Peter Schiff, the trading volume from Russia was not able to have any slight impact, by the way. He added that in their bid to store their wealth in an asset not controlled by the government, Russians prefer to use gold as the hedged asset over Bitcoin.
Due to its unpredictability, Schiff regarded Bitcoin as too risky to be considered a haven for funds or a dependable store of value. Schiff concludes by saying that Bitcoin has failed its first major test since the conflict began.