Bitcoin Price Skyrocketing Thanks To Russia

Bitcoin surges 15% on the back of increased demand from Russia as the Ruble tanks.

Bitcoin Price Skyrocketing Thanks To Russia

Bitcoin (BTC) has defied the broader stock market slump, surging 15% in the past 24 hours. The world’s largest cryptocurrency was trading at just $37,727 ($51,928 AUD) this time yesterday, and has rocketed to $43,351 ($59,669 AUD) at the time of writing. 

Bitcoin 1-Week Chart: CoinMarketCap

According to The New York Post, the surge can be partially explained by Russians clamouring to escape the tanking ruble, which is currently down over 30% thanks to the sweeping economic sanctions from the US and the EU.  

First Block Capital Founder and CEO Marc Van der Chijs told The Post he had seen bitcoin selling for $46,000 on Russian exchanges on Monday afternoon — a $5,000 premium when compared to its US price.

“There’s not normally a difference [between the US & Russian bitcoin price] because there are arbitrage possibilities,” van der Chijs said. “That seems to indicate that this urge in bitcoin price is because of Russian buying.” 

Contrastingly, research chief Dr Garrick Hileman cautioned investors not to jump to conclusions — “We see some evidence of an increase in bitcoin-ruble volume,” further warning that the current price action may not be directly correlated with Russian buying…

“There’s certainly a big uptick there compared to what the norm was historically,” added Hileman. “Is it significant enough to kind of move the price to this degree? I really can’t say.” 

It’s also possible that bitcoin’s recent surge could be attributed to people converting fiat into cryptocurrencies in order to donate to funds to Ukrainian military efforts and charities, which have raised more than US$20 million ($27 million AUD) in crypto over the past five days. 

Regardless of whether or not the current surge can be attributed to Russian demand for Bitcoin, cryptocurrencies continue to gain attention, both positive and negative as the conflict in Ukraine escalates. 

On Monday, Ukraine’s vice prime minister Mykhailo Fedorov called on crypto exchanges to block Russian users, which Binance (the world’s largest crypto exchange) staunchly refused. 

“We are not going to unilaterally freeze millions of innocent users’ accounts,” a spokesperson for Binance told CNBC. “Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists.”

While crypto investors and blockchain enthusiasts might be rejoicing at seeing some green on the charts again, it’s worthwhile to note that this could be the beginning of the most controversial crypto rally to date. 

If it is confirmed that this upwards price movement is in fact coming from increased Russian demand, it will draw a host of unwanted attention from regulators and governments around the world looking to clamp down on the Russian economy. 

This all begs the question: should cryptocurrencies remain free to be used by anyone in the world? Or, should exchanges be more willing to listen to governments, especially if it turns out that digital assets are being used to skirt sanctions and fund Russian war efforts? 

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