How Geopolitical Conflicts and Interest Rates Can Affect Cryptocurrency Price


I amIf you live in a country where there are big geopolitical problems and constantly cryptocurrency, you can linger for this. It’s not just happening abroad, the United States is also experiencing geopolitical tensions with Russia as the Kremlin continues to plot an invasion of Ukraine. With all this trouble in Eastern Europe, there’s a good chance the Federal Reserve will raise interest rates by 50 basis points, or 0.5 percent, by March. Bitcoin tends to perform very well when geopolitical tensions arise in any part of the globe due to its heavy use for transactions that are untraceable.

The problem here is that Bitcoin has been trading like a stock in recent months and is considered a higher risk growth stock. Earlier in 2022, this cryptocurrency fell heavily, and rising rates prompted investors to reduce their positions in technology and other riskier assets. In many places, Bitcoin has been labeled as a stateless currency. considering the current situation in the world. With such high volatility, it is clear that the next step will be to raise interest rates as many cryptocurrencies are trying to be regulated by the governments of many countries.

How conflicts can affect Crypto.

With the landscape changing, Bitcoin has become extremely vulnerable to the volatility of the US stock market. It means bitcoin investors will not feel safe with all the geopolitical conflict. They will remain uneasy until somehow the whole situation between Russia and Ukraine is resolved. Amid this recent situation, bitcoin is down 10% on the year and about 38% from its all-time high reached in November 2021. brings crypto winter. Everyone involved in cryptocurrency mining should remain hopeful that tensions between Russia and Ukraine can ease and they can continue mining without any risk.


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