The news that Russia has launched a “special military operation” in Ukraine dropped the Bitcoin and altcoin market by double digits. Russia’s three different attacks on Ukraine was a move that surprised the markets. FTX CEO Sam Bankman-Fried said in his Twitter posts that “BTC is currently in a state of flux” and stated that he could not predict how much it could drop. One of the prominent statements of the crypto billion was questioning why the drop was so much:
Let’s imagine the world is divided into two categories of people: fundamental investors and algorithm followers. Fundamental investors are unsure which direction BTC/USD should take in the current circumstances. Algorithm followers consult data. What is the trend historically?
Sam Bankman-Fried assesses macroeconomic factors
According to Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, the drop in Bitcoin (BTC) following Russia’s war against Ukraine is not unexpected. In his posts during the day, Bankman-Fried stated that the decline in Bitcoin (BTC) after Russia declared war on Ukraine is not surprising.
According to Bankman-Fried, the war caused a liquidity crisis in the markets, which led to sales in both traditional and crypto markets. The price drop in Bitcoin was also driven by increased correlation with the Nasdaq and S&P 500, which hit two-year highs. The CEO of FTX pointed to the currency destabilization in Eastern Europe and says that in the future, investors in the region may look for alternatives to the currency, making Bitcoin the obvious choice.
There are predictions for Bitcoin both ways
Dividing the investor mindset into two, Bankman-Fried noted that algorithmic investors prefer data, but fundamental investors consider market sentiment and market conditions. According to experts, Bitcoin’s falling more than other markets shows that crypto is a new asset class. Bitcoin is seen by many as an inflation hedge and is expected to withstand a hypothetical disaster.
At the time of writing, the BTC/USD pair is fluctuating in the $35,500 region with buyers found above January lows of $32,800.