While Ukrainians and world citizens have more pressing concerns than the price of cryptocurrency at the moment, markets are a way of quantifying anxieties, given Russia’s importance to the energy sector.
According to data from CoinMarketCap, the total cryptocurrency market cap has lost roughly 5% in the last 24 hours, bringing it to $1.6 trillion. Much of those losses came in the immediate run-up and aftermath of the invasion. In under half an hour, Bitcoin plummeted from its perch of $37,000 to below $35,500.
It’s not just crypto markets that are spooked. U.S. stock markets continued further into correction territory today, with the Dow Jones Industrial Average dropping 1.38%. Asian markets, which were open during Putin’s announcement, are also reacting; the Nikkei is down 1% and China’s Hang Seng Index is trading over 2% lower.
Economist Jason Furman, a former advisor to President Barack Obama, this week said, “Russia is incredibly unimportant in the global economy except for oil and gas. It’s basically a big gas station.”
With supply chains already stretched thin and inflation on the rise globally, an energy shortage will only add to the worries of businesses and consumers alike. Although Bitcoin is often touted as a hedge against inflation and economic certainties, it’s introduction to traditional finance means that its price movements are increasingly correlated to stock markets.