Bitcoin Tumbles As Russia-Ukraine Conflict Simmers to Boiling Point

The beat of the war drums in Eastern Ukraine saw Bitcoin prices tumble, dropping 6% in the last 24 hours to $36,723.67 at 11:31 PM EST as the tension between Russia and Ukraine escalates to simmering temperature even as Western countries try to find a last-minute diplomatic solution to the conflict.

According to data from CoinMarketCap showed, Bitcoin, the largest cryptocurrency by market capitalization, was trading above $45,000 for much of the previous week before falling below $40,000 on February 18 — a critical level that it has yet to regain.

Bitcoin is still a long way from its all-time high of $68,990 set in early November of last year.

Some speculate that the brewing war in Eastern Europe is to blame for the current downturn in the markets. Russia has massed an estimated 150,000 troops along Ukraine's borders to protest the country's impending membership in NATO. NATO is the defensive alliance of the Western world.

Tensions remain high as of this writing despite an agreement in principle between U.S. President Joe Biden and his Russian counterpart Vladimir Putin to meet to seek a diplomatic solution. However, U.S. officials have repeatedly warned of an impending Russian invasion of Ukraine, an allegation the Kremlin has dismissed as nonsense.

Global concerns about the conflict are mounting in recent weeks that saw a broad selloff in stocks, led lower by risky investments such as technology firms and matched by decreases in cryptos. Geopolitical concerns add to the difficulties of the cryptocurrency market, which has been under pressure for much of this year because of tighter monetary policy, which also hurt tech shares.

Bitcoin, in theory, can trade irrespective of existing financial markets. However, the danger of rising interest rates from central bank policies across the world and a recent "risk-off" mentality has rocked the market, as it has with equities.

Last week, Ukraine passed regulations making cryptocurrencies legal tenders in the country. It is interesting to note that a significant amount of funds are being raised via cryptocurrencies like Bitcoin to fund Ukraine's cause against Russia.

Moreover, the Russian authorities have had mixed views on the status of crypto in the country. The Central Bank wants to ban the asset, but the central government has sent a proposal to Congress to regulate its use. Recently, a Russian daily noted that the monetary authorities had reached a consensus and would soon clarify the status of cryptocurrencies in the country.