How the Ukraine War Impacts Bitcoin and Investments k3u1c

As a result of conflicts and wars, we almost always hear about gas, oil and, in rare cases, wheat. Speaking specifically of conflict between Ukraine and Russia, another example of an economic factor in evidence is the US president's concern with soaring inflation ahead of the crucial midterm elections. Therefore, in the midst of the ceasefire negotiations, it is worth making an analysis of how the ukraine war impacts bitcoin and investments. 294y3p

Cryptocurrencies, as well as the commodity market, have experienced a heightened level of volatility since Russia announced a military operation in Ukraine, marking the beginning of conflict between the two nations.

Oscillation of digital currencies during the conflict 3j1c5l

The concern with the effects of the conflict between Ukraine and Russia makes even more sense when we talk about direct and indirect global economy, in topics below we explain this concept better. In addition, it is a time to rethink investments, relationships with cryptocurrencies, spending and other issues related to the economy. However, not all cases involve short-term and long-term problems. Regarding cryptocurrencies, for example, the situation can be considered positive if you look at it from a certain angle.

Several digital currencies are increasing in value every day, unlike the beginning of the Russian invasion of Ukrainian territory. Immediately, cryptocurrencies plummeted, causing panic around the world. On February 24th, $150 billion was abruptly withdrawn from the crypto market. This is because with an uncertain war movement in the context of a recent market such as digital currencies, experienced investors will commonly undo their active risk positions. However, 6 days after the start of the war, the global economy watched the situation turn around with the 6,18% rise in Bitcoins, in addition to the significant increase in other digital currencies.

The appreciation of currencies takes place from the sanctions applied against Russia by countries of great reference in the world economy, such as the United States and Europe. In fact, the sudden devaluation of the Russian ruble against the dollar made Russian citizens, afraid of what would come next in the face of the fall of Russia's economy, deposit their investments in areas with less risk of being affected in the face of war, thus opting for cryptocurrencies.

In addition, refugees from the Russian country, afraid of robberies and thefts in the face of risky crossings to other countries, deposited their savings in digital currencies. However, the government of Vladimir Putin has banned Russian residents from transferring their money abroad – in an attempt to keep the Russian ruble from appreciating and protect its economy, which provides even greater comfort when depositing your chips in cryptocurrencies.

From the beginning of the war, the movement of digital currencies has happened on a large scale, a movement that had never been observed before. Even Russia started to use cryptos as a way to carry out transactions and escape sanctions imposed by the West.

In addition, cryptocurrencies have also been used as form of donations to the Ukrainian country – which is the place where digital currencies are most used on the entire planet – receiving money to invest in military equipment, humanitarian aid, food and medical kits. In total, the country has already received around 54 million dollars in bitcoin.

Use of cryptocurrencies on both sides of the war 3b2x1i

Cryptocurrencies are prominently observed on both sides of the war. Such assets have been a strong instrument for the Ukrainian government as they have been able to receive donations from people all over the world who the nation in its fight against Russia. So far, the Ukrainian government has partnered with FTX and Everstake to launch a donation website.

It is even worth mentioning that Ukraine’s parliament ed a bill to legalize cryptocurrency and prepare a framework for the regulation of assets such as Bitcoin and Ethereum in February. The country's president, Volodymyr Zelenskyy, signed this bill into law on March 17.

On the other hand, the cRiptoactive are in the role of circumventing the sanctions imposed by Western countries. Thus, Bitcoin, the most famous cryptocurrency in the world, was valued and was traded above U$ 44 thousand (R$ 221 thousand) this March, when it reached the highest high in a year.

Conflict causes uncertain investment landscape 233w1r

Before Russia's bombing of Ukraine on February 24, the Russian president's speeches already put the market economy at risk. Just days after the first missile was launched, European bourses dropped to an almost year-long low. Furthermore, in two weeks of war, more than 50 giant companies on the world market announced their immediate departure from Russia for not agreeing with the ideals of a bombing in Ukraine, like Ford, McDonald's, Coca-Cola, Apple, BMW and many others.

In this case, the big question among the effects of the war that involves investors around the globe is to think about the importance of adapting their portfolios. In the search for more security, the movement towards the exit of variable income in the face of the increase in the price of oil, steel, gas, grains, wheat and other products can already be perceived.

This is because faced with the possibility of an increase in inflation, directly related to the suspension of exports from both countries involved, many companies may start to present themselves as an alternative. Even with a increase in the price of commodities (raw materials), the supply and demand relationship ends up providing an increase in the price of shares.

The dollar, in this case, had been falling quite sharply since the beginning of the year, however, in the face of conflicts and inflation caused by the scarcity of raw materials, the American currency has closed on the rise. As is to be expected, the war provides an uncertain and highly volatile scenario. Therefore, the investors tend to flee to safer environments, conditioning the US currency in a constant up and down game, including in relation to the real.

How to protect investments in the midst of global conflicts? 6n5414

Amid the conflict between Ukraine and Russia, it is possible to remain stable on the stock market. For those who are already an experienced investor, taking advantage of the oil boom may be a good idea. Investment in exporting companies will benefit from a greater readjustment and as a result, shares will rise.

Search companies that are defensive against inflation is also a more accurate way to keep investments up to date. The electricity sector, for example, has revenues that are protected against inflationary pressures.

O gold remains valued and the war in Eastern Europe made the metal gain even more strength in 2022. This is certainly a kind of investment that does not measure inflation, because it cannot be manipulated through politics or an economic situation, such as the current conflict. And even Russia is the second largest producer of gold in the entire planet, so during a period of turmoil and raw materials in shortage and products undergoing price readjustments, gold is a highlight and a guarantee of investment.  

Use uranium as a way of protecting their own investments can also yield a lot for those who need a store of value. As it depends on Russia's energy source, the European Union is reconsidering reactivating its own nuclear plants. In this case, uranium is one of the essential chemical elements to compose this type of energy. In this way, investing in this product can guarantee a safe stock.

Impact on direct and indirect economy 5u16j

The economy will suffer gradual and long-term impact with the effects of war. With inflation rising, the conflict will move the entire globe, directly and indirectly. As well as the price of food, fuel, electronics, other products will be readjusted.

One of the most directly affected economies is Russia. Sanctions imposed by other countries to prevent exports from Vladimir Putin's country from being accepted directly interfere with the Russian market.

The European Union, for example, has approved new sanctions banning investments in the country's energy sector, exports of luxury goods and imports of steel products. In addition, Europe is still dependent on energy that comes directly from Russia, and a sanction that prevents the import of this consumer good, in addition to directly impacting the European Union's own production initiative, projects a devaluation of the Russian ruble.

Even the Russian economy depends directly on the export of oil and gas, being the second largest exporter of the product worldwide. However, with the sanctions imposed by the United States, Canada and the United Kingdom, oil faces a problem not seen in more than 40 years. In Brazil, it is already possible to feel the rising cost of gasoline and cooking gas with the relation of imported products going through the supply and demand effect, that is, there is less available on the market to buy and more people who need the product.

In addition, Brazil is the fourth largest consumer of fertilizers in the world and ends up suffering an indirect impact also due to the 23% of products imported directly from the largest country in Eastern Europe. Sales have already stalled in the face of a direct consequence of the war. The route of fertilizers to reach Brazil is dangerous, there is no safe transaction for the inputs to reach Brazilian lands.

Regarding food, Russia and Ukraine are considered major exporters of sunflower oil. The two countries represent 60% of the world's production and both are major producers of grains, such as wheat, and this can directly affect other regions that depend on the commidity coming from the Black Sea region. The price of products produced with the grain can increase, as well as canned products, since Russia also has the supply of most of the metals used around the globe.

Aluminum cans, copper cables and other car components may have a readjustment in values. An example is the 30% increase since the beginning of the year in aluminum and nickel.

Falling Russian oil production could affect the global market 43441p

On February 24, Russian President Vladimir Putin announced a special military operation in Ukraine. As the second largest exporter of crude and refined oil, with 7% of the world's supply, the war causes a rise in the price of the commodity extracted on Russian territory. In this way, there would be shortages due to less Russian supply.

Almost a month after the start of the conflict, on March 17, oil operates at a high amid this concern, even more so after the International Energy Agency (IEA) reduced its supply forecast for this year. The information that the Kremlin would have denied advances in negotiations for an agreement with Ukraine also drives such a price increase.

“This is due to a sharp drop in oil production in Russia, which is expected to drop by 3 million barrels a day from April on of sanctions and the voluntary boycott of many buyers.”

Commerzbank, the second largest commercial bank in

Learn more 2l2m1s

To learn more about the effects of the Ukraine-Russia war, check out the companies that suspended business in Russia due to the war. Multinationals such as Apple, Netflix and Mastercard apply sanctions to pressure the Russian government to end the conflict.

Sources: NBC News, Vox