Bitcoin jumps 13 percent amid Russian-Ukraine Conflicts

Bitcoin increased by 13% on Tuesday, extending its strong recovery as Russia's war on Ukraine continues and the US tightens sanctions.

According to CoinDesk data, the cryptocurrency was up more than 13% at $43,500.16 as of 3:03 a.m. ET, after hitting a high of $44,165.90 in the previous 24 hours. Following Russia's invasion of Ukraine, risk assets such as stocks dropped precipitously, causing bitcoin prices to plummet last week.

On Thursday, bitcoin trading in Russian roubles went into overdrive, with daily volumes rising 259 percent from the day before to 1.3 billion roubles ($13.1 million), according to CryptoCompare data.

Meanwhile, in Ukraine, the daily trading volume of cryptocurrency exchange Kuna has more than tripled to 150 million hryvnias ($5 million).

Vice Prime Minister Mykhailo Fedorov tweeted Bitcoin and Ether wallet addresses, coupled with an appeal: "Join hands with the Ukrainian people. Donations in cryptocurrencies are now accepted."

According to blockchain analysis firm Elliptic, Fedorov's government and Ukrainian non-governmental organizations raised more than $22 million in cryptocurrency as a result of the pleas.

While Bitcoin is gaining traction as a currency of choice in places of geopolitical danger, market participants warn that opinions disagree on whether it can be used as a "safe-haven" asset, akin to digital gold.

Throughout the five days following Russia's invasion of Ukraine on February 24, Bitcoin has surged 13%, while the S&P 500 US stock index, which it closely resembles, has risen approximately 2%, and traditional safe-haven gold has remained mostly flat after rising as high as 3.5 percent on the day of the invasion.

According to Coinglass statistics, around $300 million in short Bitcoin bets were liquidated on the day of the attack, while Singapore-based QCP Capital reported "a good chunk" of leveraged long holdings were liquidated.

Cryptocurrency assets and transactions are frequently held in wallets on decentralized platforms that may be accessed from anywhere, in addition to being largely anonymous.

"Bitcoin could be a potential safe haven for Russian oligarchs avoiding sanctions as there will be no censor on the Bitcoin network and on cryptocurrency transactions," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

According to CoinMarketCap, stablecoin transactions accounted for more than 83 percent of the whole cryptocurrency market's 24-hour trading volume on Friday.

The largest stablecoin, USD Tether, saw its market capitalization reach an all-time high of about $80 billion, while gold-backed cryptocurrency PAX Gold saw its market capitalization increase by nearly $100 million in just two days.

"Cryptocurrencies could act as a powerful store of value for a major part of holdings that don't need to be liquid."