Crypto market capitalization dropped to $1.5T amid Russia-Ukraine Invasion

As Russia initiated a special military operation against Ukraine, the crypto market valuation fell to $1.5 trillion, a loss of about 9 percent in just 24 hours. The potential of global economic harm weighed heavily on broader financial markets, with the Stock 600 Europe index falling more than 3%, micro Nasdaq 100 futures falling 2.3 percent, and Russia’s MOEX equities index tumbling a record 28 percent.

Bitcoin has dropped 8.79% in the last 24 hours, reaching $35,334. The fear and greed index, which measures public mood in the cryptocurrency market, dropped two points to a fear level of 23.

The escalation of tensions around Ukraine put pressure on riskier assets. With the introduction of Russian forces into Donbass, there is a greater potential of escalation. Risky assets may continue to fall in value in such a scenario. Donbass refers to 2 Ukrainian breakaway territories controlled by separatist parties. The decline in crypto illustrates that the industry is still a nascent asset class when compared to established markets. Cryptocurrencies are selling at a higher rate than developed-world stocks, demonstrating the risky nature of these assets and their inability to replace gold.

As key cryptocurrencies fell more than 10%, liquidations, or losses on crypto-tracked futures, reached over $250 million. Ethereum has dropped 12 percent of its value in the last 24 hours, with Cardano’s ADA and Solana’s SOL plunging as much as 16 percent. Investors continue to retain bitcoin. Despite the dip in pricing, long-term investors’ wallets held record levels of BTC at 76.5%, indicating that some investors are still nurturing the alleged hedging potential of the world’s largest cryptocurrency.

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