Bitcoin bucks S&P correlation trend with uptick as Ukraine crisis escalates
BNN Bloomberg
Cryptocurrencies appear to be kicking off the week with a more positive outlook than U.S. stocks, just as some strategists are predicting the recent high correlation between the two may begin to ease.
Bitcoin surged the most since July amid speculation cryptocurrencies will gain favor in the wake of sanctions against Russia.
“Many Russian citizens and potentially Ukrainian citizens are cut off from being able to move their rubles, dollars, euros or anything else,” said Anastasia Amoroso, chief investment strategist at iCapital. “When the rails of the traditional banking sector get cut off, the decentralized applications can still work.”
Digital coins formed a sea of green Monday, with Bitcoin and Ether soaring following a volatile weekend. Bitcoin rose as much 12 per cent to US$41,946, while Ether gained about 8.7 per cent. Even outlier altcoins and memecoins such as Solana’s SOL, Terra’s LUNA and Dogecoin, which are more prone to wild volatility, pushed higher.
“With the banking situation unstable in the region as a whole, we may be seeing some flock to crypto as another potential means of payments,” said Stéphane Ouellette, chief executive of Frnt Financial Inc. “Either that or it could be speculators assuming that there will be more demand for crypto in the region, somewhat of a chicken or egg situation.”
Trading volumes in Bitcoin using the ruble have surged to the highest level since May, while those based in Ukraine’s hryvnia have climbed to a level not seen since October, according to crypto data firm Kaiko.
