Bitcoin and other cryptocurrency prices are jumping following a plunge this week in the value of Russia’s currency — a sign, according to some analysts, that Russian investors are shifting their money out of the ruble as economic sanctions against the country for its invasion of Ukraine take hold.
Bitcoin on Wednesday rose to $44,188 after falling as low as $36,370 last week. Other leading cryptos, including ethereum, ripple and solana, were either flat or saw gains of at least 2%.
Meanwhile, the ruble plunged to a record low against the dollar on Monday, dropping to under 1 U.S. cent, and has hovered there since.
Investors are “trying to get out of the ruble” after its “drastic devaluation after all the sanctions,” Bendik Schei, head of research at Norway-based Arcane Research, told CBS MoneyWatch.
“Under the current market conditions, I’m not surprised to see investors — at least those in Russia — seeking stablecoins,” Schei said. Stablecoins are seen as less volatile than cryptocurrencies because the value of the underlying crypto is fixed to a traditional currency like the U.S. dollar or a hard asset like gold.
Another factor that may be pushing up crypto prices is growing unease among some younger investors about government actions that affect currency prices, including this week’s economic sanctions against Russia.
“There’s an entire young generation, out there, of investors who have for some reason become doubters of government,” said Michael Oliver, chief analyst for financial industry research firm Momentum Structural Analysis. “The Ukraine-Russian thing happening is an example of people thinking, ‘Gee, is my money safe in that bank account?'”
Those investors see crypto as a way to “hide their money” from government control, he added.
Some people are also using cryptocurrency to donate money to Ukraine. Investors have donated more than $22 million worth of crypto to the Ukrainian government during the conflict, according to blockchain analytics firm Elliptic.
Cryptocurrency can be used “to donate to causes all around the world with much less friction than the existing banking system,” George Harrap, co-founder of Solana portfolio manager Step Finance, told CBS MoneyWatch.
nfiscation,” Powell tweeted.