Popular cryptocurrency Bitcoin (BTC) has flipped the Russian Ruble in terms of market capitalization, amid the ongoing war between Russia and Ukraine. 

According to Coinmarketcap data comparing Bitcoin against large fiat currencies, the asset class moved two steps upwards in the latest ranking to usurp the Rubble and Thai Baht. 

The market capitalization, which is stated in BTC saw the largest cryptocurrency have a massive 18,990,072 Bitcoin ($779.66 billion) while the Russian Ruble has a market cap of 16,462,964 BTC ($675.90 billion). 

Per the latest ranking, Bitcoin is in the 14th spot of the world’s largest currency, directly below Swiss Franc. 

This comes as several countries, including the United States, prepare a number of sanctions against Russia, as the country led by President Vladimir Putin continues its invasion of Ukraine. 

Bitcoin, which suffered huge losses in the early hours of president Putin’s declaration of an invasion on Ukraine, is up by 5%, breaching the $40,000 resistance. 

At the time of writing this line, the cryptocurrency is up 5% in the last 24 hours, as it currently trades around $41,000 across several exchanges. 

The cryptocurrency has been called into action throughout the war, with several cryptocurrency enthusiasts sending BTC donations to Ukrainian NGOs in a bid to support the country. 

As of today, over $10 million in BTC has been raised, with other cryptocurrency proponents, including Binance CZ indicating interest to increase the funds in the coming days. 

Today Analysts at asset management company Grayscale Investments reviewed the factors affecting prices and presented their opinion. The specialists noted that risky assets like Bitcoin historically bottomed just before the outbreak of Wars, so there is a high chance of seeing a new rally.

A well-known economist and analyst, Alex Kruger, expressed that if Russia used crypto to bypass sanctions, it would be a worst-case scenario for Digital assets.

Kruger also said that the cryptocurrency market had reached the bottom, and if the geopolitical situation does not worsen, investors will soon see the growth of digital assets.

Alex Kruger expressed concern about the hypothetical possibility of Russia using cryptocurrencies to circumvent US and EU sanctions. He posted a message on Twitter. He warned investors that if Russia turns to cryptocurrencies to avoid US sanctions, the digital asset market will become the central focus of intense criticism and restrictions from the United States and European supervisory authorities.

“Russia using crypto to bypass sanctions would be dreadfully bearish. Don’t expect it to happen, be careful what you wish for.”

Russia using crypto to bypass sanctions would be dreadfully bearish

don't expect it to happen

but be careful what you wish for

— Alex Krüger (@krugermacro) February 24, 2022

Krueger suggests that sanctions circumvention will be enough for U.S. and EU regulators to ban digital assets to protect national security.

“US regulators would be pushed to crush the industry as a matter of national security.”

The United States, along with allies, has imposed sanctions against Russia that include cutting off Russia’s major financial institutions from the US financial system. According to Krueger, prices for cryptocurrencies and traditional assets such as stocks and commodities bottomed out after that:

“Stocks and cryptocurrencies have bottomed out. Now everyone is starting to reinvest.”

In his opinion, the cryptocurrency market has passed the worst-case scenario and is set for a positive trend. Krueger believes that the changes in market behavior resulting from deterioration in the geopolitical situation are traditional. He stressed that the conflict is relatively large-scale, but this did not significantly affect the cryptocurrency market.

This week, amid heightened tensions in eastern Europe, experts at The New York Times said that it would be impossible to survive the US sanctions without Russia’s taking aid of digital assets.

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.

If you’re a crypto investor and you’re lucky enough to not be directly impacted by the conflict in Ukraine, here’s your opportunity to start reading up on it. https://t.co/U9FIm1RBFo #rates #yieldcurve #inflation

— Grayscale (@Grayscale) February 25, 2022

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:

“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.”

? 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. ? https://t.co/06MTkomsnw pic.twitter.com/mVpiBp4Q0x

— Santiment (@santimentfeed) February 28, 2022

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 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.”