Bitcoin prices are as volatile as ever. Last week, it rallied to $45,000 only to fall sharply, closing at $39,600 on Friday, March 4. Why is the Russia-Ukraine conflict having an impact on Bitcoin prices?
When Russia invaded Ukraine, global banks banned many Russian institutions from SWIFT. On Feb. 28, markets speculated that cryptocurrency platforms would block Russian accounts. That did not happen.
Ukraine asked major crypto exchanges to block the address of Russian users. Coinbase (COIN) correctly denied the request. The platform could not hurt economic freedom that hurt the average Russian citizen. The Russian government instigated the attack. Besides, the transaction amounts are so small. It is unlikely that oligarchs and other targets would use any of the exchanges. The sanctions should suffice.
In the future, the government may make a case of exchanges being agents of money laundering and terrorism. When that happens, expect more regulations on the Bitcoin market. Bitcoin prices fell in response to the potential risk.
Your Takeaway
Volatility for Bitcoin will increase in the days ahead. The government will evaluate the role exchanges play in geopolitics. For now, the crypto exchanges need to give access to ordinary citizens anywhere in the world.
