Bitcoin tanks 12% after Moscow strike on Ukraine; altcoins bleed

New Delhi: Following a military strike in Ukraine by Russia, the digital token market nosedived. The largest crypto token Bitcoin tumbled as much as 12 per cent on Thursday.

The crypto behemoth slipped below $34,500 levels from $39,122 earlier. However, it recovered back to $34,732 by 13.00 hours IST, the data from coinmarketcap suggested. The total volumes zoomed over 41 per cent as Bitcoin worth $32.5 billion exchanged hands in the last 24 hours, the data suggested.

The Biden administration enacted fresh sanctions on Russia over the conflict in Ukraine, aiming to thwart its access to foreign capital. According to a New York Times report, Russia could use cryptocurrency to blunt the force of US sanctions.

There are no surprises here why Russia is eyeing to legalize Bitcoin before invading Ukraine, said Sharat Chandra, VP- Research & Strategy, EarthID.

The total circulating supply of Bitcoin stands at 18,966,950 units, with total supply capped at 21 million according to its white paper, filed by its pseudonymous founder Satoshi Nakamoto.

The Put-Call ratio for Bitcoin options expiring on February 25 surged to 2.18 after Russia declared war, said Chandra. "Investors were buying short-term put options. As of now, a total of 137 million Bitcoin put options expiring on February 25 have been traded today," he added.

Not only Bitcoin, its closest peers also faced the wrath amid a sharp selloff. Ethereum and BNB dropped about 14 per cent each to barely hold the $23,000 and $325 mark, respectively.

Other Altcoins including XRP, Cardano, Solana, Terra and Avalanace tumbled up to 17 per cent. Leading meme tokens Shiba Inu and Dogecoin crumbled 16 per cent each.

The global crypto market tanked more than 10 per cent to the $1.55 trillion mark. However, the traded volumes of the digital assets spiked rapidly to $108 billion.

The crypto market capitalisation dipped into the reds as geopolitical uncertainties grew, drawing an increasingly interconnected relationship between digital assets and the financial markets, said CoinDCX Research Team in its note.

"With no end in sight for the ongoing geopolitical conflict, the traditional market and the digital asset sector may face extended uncertainties in the road ahead," it added.