The tension between Russia and Ukraine over the latter’s possible accession to NATO has reached new heights in recent days, and while talks are being held between representatives of the two nations, the situation remains decidedly uncertain. And given just how interconnected the world has become in recent decades, it also remains uncertain for financial markets, including crypto.
Well, according to a wide range of analysts speaking with Cryptonews.com, the impact of the Ukraine-Russia crisis — and its potential worsening — on the cryptoasset market may not be as dramatic as you’d fear. However, that’s largely because other, mostly macroeconomic factors are weighing the market down at the moment.
Up until now, the crisis has had some impact on financial markets, including the crypto market. That said, most observers say that the downturn we’ve seen over the past few weeks is largely the result of things other than Russia-Ukraine tensions.
“While the crisis in Ukraine certainly has bearing on the stock markets, it’s important to note the confluence of multiple factors currently affecting the global economy. These include the continued prevalence of COVID-19, negative labor and supply chain shocks, inflation concerns, the [Federal Reserve (Fed)] signaling its intent to raise interest rates, and persistent economic inequality,” says Mark Elenowitz, the president of Zug-based fintech company Horizon.
He suggests that, while the Ukraine crisis may be causing some concern among investors, the current downturn likely finds its primary causes in much deeper, more systemic trends. This is also the view of Marc Chandler, the Managing Director at Bannockburn Global Forex, who says that outside of Russian and Ukrainian bonds (and the Russian rouble), the impact is “minor at best.”
“Two reasons, I think: first there are bigger immediate issues for more investors like the Fed meeting and the aggressive tightening many anticipate, plus the market was overvalued by most estimates; and second, look at what happened in [February] and March 2014 when Russia invaded Ukraine, took and annexed Crimea,” he told.