• Crypto donations for Ukraine
• Increased trading volume
• Dedollarization Ahead?
Bitcoin & Co. are of particular relevance in the Ukraine war
Cryptocurrencies play a special role in the war between Russia and Ukraine. Not only were cyber currencies such as Bitcoin legalized in Ukraine shortly before the start of the war, but the country under attack has now received millions in crypto donations. But digital currencies could also be used on the Russian side to circumvent EU and US sanctions, according to European finance ministers. However, crypto expert Philipp Sandner does not assume that the coins are suitable for circumventing the trading restrictions. “In order to use cryptocurrencies as a means of payment and thus avoid the sanctions, the infrastructure would first have to be in place,” Sandner told “manager magazin”.
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Novogratz: “This is the reason why Bitcoin was created”
According to Bitcoin bull Mike Novogratz, the armed conflict could have even more far-reaching consequences for the foreign exchange market. According to calculations by the analysis company Kaiko, which “CNBC” reported, the transaction volume between Bitcoin and the Russian ruble or Ukrainian hryvnia has increased significantly since the beginning of the war. And the price of the largest cryptocurrency has also recovered significantly in the last few days.
According to Novogratz, the current situation could allow more people to engage with cryptocurrencies, as decentralized currencies are available even when access to traditional banks is no longer available. “That’s a message: I want money that lives outside of traditional power,” said the Galaxy Digital Holdings founder in an interview with “Bloomberg”. “That’s why bitcoin was created, because people don’t trust governments.” Transactions on the blockchain, on the other hand, are transparent and traceable.
However, he emphasized that Bitcoin is not a means of circumventing sanctions.
US dollar may soon lose reserve currency status
According to Novogratz, the events in Ukraine and the resulting strengthening of the crypto market could have even more far-reaching consequences – especially with regard to China. The Middle Kingdom claims the island nation of Taiwan, located east of China, for historical reasons. According to Reuters news agency, the country has been under China’s military pressure for about two years to recognize its affiliation with China. In the course of this, the People’s Republic could also detach itself more and more from the US dollar, believes the crypto fan. Accordingly, he assumes that the Chinese government will part with its dollar reserves before intervening in Taiwan. “This is a big deal in many ways. This is the beginning of an accelerated de-dollarization of the world,” said Novogratz.
Bullish view for crypto market
Novogratz has often expressed optimism about the Bitcoin price in the past. He recently explained that he is not critical of short-term price drops in cryptocurrencies because digital currencies are a “growth industry”. Therefore, he does not see his company Galaxy Digital, which specializes in digital assets and blockchain technology, threatened – quite the opposite. In a conference call in November 2021, according to “The Street”, he is said to have announced that the crypto group was a growth company. “As the crypto economy continues to mature and adoption trends accelerate, fueling both asset price appreciation and larger amounts of institutional capital into the space, I have never been more optimistic about the future of our company,” said Novogratz.
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