Putin’s sabre rattling is shaking the cryptocurrency market

Cryptocurrencies around the world are getting pummeled today. A quick glance at CoinDesk’s tracker will show you a wall of red. At the time of this writing, most major cryptocurrencies are down at least 5% or more, including Bitcoin, which is down nearly 7% to $40,443; Ether is down almost 6% to just over $2,900; and Dogecoin and Shiba Inc are down 4.5% and 6.5%, respectively.

So what’s causing this downturn? Unlike recent selloffs, which were largely driven by the threat of increased regulation by the likes of China or the United States, today’s selloff appears to be purely geopolitical. With the threat of Russia going to war over Ukraine, and Russian President Putin announcing he’ll oversee nuclear military drills this weekend, investors are ditching volatile stocks and digital assets in favor of more stable assets like gold.

And this is a huge problem not just for crypto’s value, but for cryptocurrencies’ overall narrative, too. As CoinDesk points out, “The crypto community has long hailed bitcoin as an asset to hold during economic or geopolitical issues worldwide. However, the narrative has yet to materialize into reality, with the cryptocurrency continuing to move in lockstep with growth-sensitive risk-on assets like equities.”

What that means is that the short-term future of the value of cryptocurrencies likely hinges on one man and what he chooses to do: Vladimir Putin (sorry, Elon).