If you live in a country where there are major geopolitical problems and constantly mine cryptocurriency, you might want to stick around for this. It’s not just abroad, the United States is also undergoing geopolitical tensions with Russia as the Kremlin keeps planning to invade Ukraine. With this entire issue in Eastern Europe, there are great chances of the Federal Reserve increasing insterest rates by 50 basis points or 0.5 percentage by the month of March. Bitcoin tends to perform very well when there are geopolitical tensions in any parto of the globe due to its heavy use for transactions that can’t be traced.
The issue here is that in recent months, Bitcoin has been trading like equities and has been regarded as a higher risk growth-oriented stock. Earlier in 2022, this cryptocurrency siffered a major drop and rising rates pushed investors to shed positions in tech and other riskier assets. In many places, Bitcoin has been labeled as a stateless currency. given the current situation around the world. With such high volatility, it’s obvious that the next step would be to increase interest rates as many cryptocurrencies are trying to get regulated by governments in many countries.
How conflicts can affect Crypto.
With the change in landscape, Bitcoin became extremely fragile to the U.S. stock market volatility. This means Bitcoin investors won feel secure with the entire geopolitical conflict. They will remain uneasy until the entire situation between Russia and Ukraine is somehow resolved. Amid this recent situation, Bitcoin is now 10% down for the year and about 38% from the all-time high it experienced back in November, 2021. Tech and growth stocks will stay in a chokehold for a few months at least, which inevitably brings a crypto winter. Everybody who mines crypto should remain hopeful that tensions between Russia and Ukraine can ease and they can continue their mining without any risk.