Crypto markets are rebounding after the initial shock of Russia’s Ukraine invasion.
Bitcoin and Ether, the two most popular cryptocurrencies, both saw major price jumps early Tuesday as the global cryptocurrency market cap surpassed $2 trillion, according to CoinGecko. The skyrocketing prices come after nearly $200 billion was erased from the market following Russia’s invasion of Ukraine last week.
After trading below $39,000 yesterday, Bitcoin jumped more than 13% to above $44,000. Ether, which at one point reached a low of $2,795 yesterday, increased a little more than 8% for a 24-hour high of $3,029.
Prices retreated slightly Tuesday afternoon, with Bitcoin trading at $43,400 and Ether trading at about $2,900. Both cryptocurrencies are still more than 35% below their highs last November.
Both Bitcoin and Ether saw their value drop precipitously after President Joe Biden and the European Union announced increased sanctions against Russia after it invaded Ukraine. On Feb. 24, both Bitcoin and Ether sank to their lowest levels in months, rivaling declines in late January. In a matter of hours, Bitcoin had dropped to $34,459 and Ether had dropped to $2,308.
Cryptocurrencies, especially Bitcoin, have been touted by investors as a hedge against rising prices and an asset that will hold its value during periods of traditional market volatility. But recent price swings ta ke away from that argument, as the crypto market and traditional finance markets seem to be more aligned than at odds.
Regardless, some investors, including many in Russia and Ukraine, have switched to crypto as other markets are shut down or sanctioned, and the price of the ruble has plummeted.
Crypto trades using the Russian ruble and the Ukrainian hryvnia surged to levels not seen in months, according to crypto data company Kaiko, CNBC reported. Because cryptocurrencies can be traded using online exchanges instead of banks and other intermediaries, they could also be a way for wealthy Russians to skirt sanctions.
Despite calls from Ukraine’s government and others to block Russians from crypto exchanges, the world’s largest exchange, Binance, said Monday it would not unilaterally block Russian users.