How has the Ukraine war affected cryptocurrencies? [Vídeo]

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On February 24, Russia invaded Ukraine. The war, which has already claimed thousands of lives, is the greatest tragedy on European soil since the disintegration of Yugoslavia. And although human suffering is the most horrible thing about this situation, it is only one of the realities affected by the conflict.

The economy has also felt the effects of the war, and that includes cryptocurrencies -which Ukraine has legalized once the conflict started– as we tell you in this video:

The same day of the invasion, the markets reacted by contracting significantly, a fact that in Bitcoin translated into a flash drop to $34,500, its lowest point in a month. Since then, Bitcoin, Ethereum and the rest of the cryptocurrencies have been recovering in the same way as the rest of the markets.

What does this movement respond to? First, to an uncomfortable reality about crypto: they are not an independent market with its own rules. Current events and traditional market movements profoundly affect digital currencies. Any news that affects the stock market will affect cryptocurrencies in almost equal measure.

Second, the recovery of the crypto market despite the deep political and social crisis in which the world has been involved, has also happened because neither Russia nor Ukraine are countries with great weight in cryptocurrencies. They do not constitute large nests of miners or investors, nor do their laws invite the proliferation of digital assets. Therefore, once the initial shock had passed, prices have stabilized.

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Markets are likely to continue this move unless something else shocks. The possible entry of Belarus into the conflict or its extension to other countries such as Poland, Moldova or Georgia, would have a very negative impact on prices.

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