Bitcoin price crashes overnight as Ukraine-Russia tensions escalate
BTC's value dipped by 7% after President Putin expelled one of America's chief diplomats from Russia's borders yesterday.
- With the threat of an all-out war between Ukraine and Russia mounting rapidly, inflation rates all over the globe have continued to increase.
- The total market capitalisation of the crypto market has once again slipped below the AUD$2.8 trillion (US$2 trillion) mark.
- Berkshire Hathaway vice chairman Charlie Munger likened the crypto industry to an STD as part of the company's shareholders meeting earlier this week.
Bitcoin, the world's largest cryptocurrency by total market capitalisation, cannot seem to catch a break. After having stabilised around the AUD$61,000 (US$44,000) range for over 72 hours running, the premier digital asset has once again plummeted hard, registering daily losses of around 7%. At press time, BTC is trading at a price point of AUD$56,600.
The development came after it became increasingly apparent that the ongoing Ukraine-Russia crisis had escalated further, especially as President Putin decided to expel Bart Gorman, the US deputy chief of diplomatic missions, due to President Biden's siding with Ukraine.
On the subject, CIO at ExoAlpha David Lifchitz noted that even though a war-like situation has continued to brew, issues relating to inflation and interest rate hikes have become even worse, adding: "The inflation/rates issue is a multi-year issue that can hit much more, on a broader scale, and for a longer time."
In terms of where Bitcoin may be headed in the near term, Lifchitz noted that if the flagship asset isn't able to witness a "significant break below US$33,000 or above US$48,000", volatility will continue to remain the order of the day, with most altcoins following suit.
Despite the recent weakness, a number of independent analysts have continued to state that BTC's overall long-term outlook seems to be quite strong, with the total market capitalisation of the sector now standing at AUD$2.8 trillion (approx.), with the flagship crypto's dominance now hovering at 41.7%.
Warren Buffet's right-hand man continues to slight crypto
Charlie Munger, Berkshire Hathaway's vice chairman and Warren Buffett's right-hand man, recently likened cryptocurrencies to a sexually transmitted disease as part of a recent shareholder's Q&A session hosted by the Daily Journal Corporation. The 98-year-old investing icon said: "I certainly didn't invest in crypto. I'm proud of the fact that I avoided it. It's like some venereal disease."
He went on to state that he wished the American government had banned the entire industry — much like China — straight after its inception. Both Buffett and Munger have repeatedly criticised the crypto market in the past, with the former even referring to Bitcoin as "rat poison squared", as well as an asset that "does not create anything of value".
What lies ahead?
As North Atlantic Treaty Organization (NATO) forces — of which the US, Canada and most major European countries are a part of — continue to line up against the Ukrainian border, it appears as though markets across the board will continue to be affected.
For example, over the past few days, most stocks (barring defence stocks, for obvious reasons) have continued to plummet along with Bitcoin and Ethereum, with most analysts expecting more of such action over the coming few days and weeks.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.