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HomeCrypto NewsMarketGrayscale Assess Impact Of Ukraine War On Bitcoin While Concluding Buy The Invasion

Grayscale Assess Impact Of Ukraine War On Bitcoin While Concluding Buy The Invasion

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Russia’s invasion of Ukraine hits global markets, including cryptocurrency.



Analysts at asset management company Grayscale Investments reviewed the factors affecting prices and presented their opinion.

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Analysts noted a significant correlation of Bitcoin with the S&P 500 and PCT indices in early 2022. There was a rally in risky assets in January, but as rumors about the Ukraine war started to emerge, there was a sell-off.

The same idea Of BTC and S&P correlation is provided by Santiment:

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“Global stocks are starting the week in the red yet again, with #SP500 futures down more than -2% as #war concerns loom. #Bitcoin has remained closely pegged to #equities, as traders await a breakout sign. Pay close attention to this relationship.”

 

According to Grayscale, the bears believe that further escalation of the conflict from Russia will lead to lower prices as the future actions of the Russian Federation are already embedded in the market, so the prices are declining.

According to the Grayscale specialists, if the price fall continues in the coming days or weeks, despite the abundance of “bad news,” this will be a sign of exhaustion of the sellers’ momentum.

Grayscale also feared that markets were reacting in expectations of a Fed rate hike. Given the current geopolitical uncertainty, bidders are re-evaluating their anticipation of Fed action.

Some investors believe that the risks of a rate hike are underestimated, as the Fed may feel the need for more aggressive measures. Others suggest that the agency has received more wiggle room to act softer.

Grayscale analysts are confident that the Fed will continue to monitor how the geopolitical situation develops and the markets’ reaction. According to them, lowering expectations of an interest rate hike will favorably affect risky assets, including cryptocurrencies.

The company noted that bearish sentiment prevailed when severe anxiety was observed at the beginning of the COVID-19 pandemic. Skeptics do not exclude that the situation may worsen and the selling will continue. On the other hand, the Bulls are expecting a rally soon as the selling momentum loses its steam. Grayscale supports the second opinion.

The specialists noted that risky assets historically bottomed just before the outbreak of Wars. They also emphasized that Russia and the US will not enter the Cold War, so there is a high chance of seeing a new rally. This is true for cryptocurrencies as well, according to Grayscale.

grayscale data showing buy the invasion

Grayscale said bitcoin is considered a high-risk asset, but the resulting volatility could be a good buying opportunity for long-term investors. Analysts indicated that Bitcoin continues its long-term uptrend while outperforming gold.

Rosun Patel, vice president of Genesis Global Trading broker, voiced a similar opinion.

“If you believe btc_marketcap/gold_marketcap -> 1.0 overtime today has been a great entry on that parameter.”

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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