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As Russia Attacks Ukraine, The Crypto Market Capitalization Experiences Slump to $1.5 Trillion

Cryptocurrencies took a huge dive down to 9% on Thursday, with a few analysts stating that this asset class remains a risky offering.

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Photo by Max Kukurudziak on Unsplash

The market capitalization of every single cryptocurrency just experienced a massive slump, having been lowered as far down as $1.5 trillion, which essentially means losing almost 9% in just a day. This happened of course, just as Russia launched a “special military operation” against Ukraine. The prospect of damage to the global economy was also weighed on the broader financial markets as well, like with the Stoxx 600 Europe index falling more than 3%, micro Nasdaq 100 futures down 2.3% and Russia’s MOEX equity index dropping a record 28%.

Bitcoin too, fell 8% in the past 24 hours, as it touched $34,725 in the early Asian hours. As for the fear & greed index, which is a tool that’s used to calculate the public sentiment of the crypto market, fell down 2 points to a “fear” level reading of 23.

Financial analyst Alex Kuptsikevich, who works at FxPro, said “The aggravation of tension around Ukraine exerted pressure on risky assets,” in an email to CoinDesk. “There are growing risks of escalation associated with the introduction of Russian troops into Donbass. In such a situation, risky assets may continue to decline further.”

What this slide in cryptocurrencies ends up showing is that the sector, at the moment, remains a nascent asset class when you compare it with traditional markets, according to Kuptsikevich said.

“We see that cryptocurrencies are selling stronger than developed world stocks, confirming the risky nature of these assets and how they are not a replacement for gold.”

Regarding liquidations or losses on crypto-tracked futures, they reached over $250 million in early Asian hours. This is as major cryptocurrencies took a tumble of more than 10%. Then, in the past day, it ended up losing 12% of its value, with Cardano’s ADA and Solana’s SOL diving down to as much as 16%.

Despite this though, investors still hold bitcoin per the metrics tracked on Glassnode, an analytics tool. Long-term investor wallets hold, despite their drop in prices, record volumes of BTC at 76.5% as of Thursday morning. The data suggests that investors are indeed continuing to nurture the purported hedging capabilities of what is known to many as the world’s largest cryptocurrency.

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