Bitcoin and other cryptocurrencies have jumped this week. Prices originally dipped due to Russia invading Ukraine. Now, they’re on the rise again.
Bitcoin jumped almost 17% today, March 1. It last rose by 16.9%, to a whopping $44,511.20. Ether also saw a big raise. The cryptocurrency jumped 15.2% to $3,022.68.
Prices went down drastically last week as risk assets were sold off. Experts think that this jump could be caused by a few different reasons. For one, investors could be buying all of the assets that got sold off last week. Investors could also be attempting to evade sanctions. Ukrainians and Russians could be using Bitcoin to get their money out of the country.
Can Russia Use Bitcoin To Evade Sanctions?
This jump in Bitcoin comes as the U.S. decides to impose sanctions on Russia. Americans cannot do any business with Russia’s central bank. On top of that, the country’s assets in the U.S. have been frozen. Other countries have done the same.
There’s been a lot of debate over the part Bitcoin plays in this situation. The crypto isn’t owned or issued by a single authority. Thus, people are wondering if Russia could use it to evade sanctions.
According to one investor, that could very well be the case. “I would say that’s the reason why bitcoin has shown strength now — because the Russians have a way of getting money out, getting their wealth out,” said Mark Mobius, founding partner of Mobius Capital Partners.
However, others think that the amount of money that Russia would need to convert would be too much.
“You’re going to see Russia attempt to circumvent the U.S. financial system by turning to crypto,” said Ari Redbord, head of legal and government affairs at TRM Labs. “I think the issue is … the liquidity just simply isn’t there.”
Crypto Could Be Used For Individual Residents
Cryptocurrencies like Bitcoin might not work for Russia as a whole, but individuals could use them. This could prove to be an effective way for regular Russian and Ukrainian citizens to get their money out of their countries. Many are trying to do this, due to the volatility of their currencies.
CNBC reports that Bitcoin has been trading at a 6% premium on the Ukrainian hryvnia market. There’s been a surge in Russian ruble and Ukrainian hryvnia crypto transactions.
Over the weekend, the vice prime minister of Ukraine asked crypto exchanges to block these transactions. Mykhailo Fedorov wanted all major exchanges to block the addresses of Russian users. The world’s largest exchange said that it would freeze accounts for any Russians that were on the sanctions list. However, it wouldn’t block the accounts of all Russian users. Other crypto exchanges agreed to similar terms.