The Bitcoin price is in short-term up trend, but there are no clues that comes from a flood of illici funds into crypto market.
While the selloff in other risk assets happen in Russia’s invasion of Ukraine, crypto prices have increased for 3 days, partially in response to the sweeping sanctions from the U.S. and other world powers.
But this increase doesn’t come from institutional or government level transaction dodging sanctions.
Ruble-denominated crypto trading pairs have jumped since the U.S. announced its first sanctions on Russia on Feb. 22, according to research firm Chainalysis.
Ukraine’s Hryvnia-based crypto trading also jumped initially, although the increased volume has been less persistent.
According to Chainalysis, the volumes “could also be driven by individuals in both countries reacting to the recent devaluation of the ruble and hryvnia and attempting to preserve their savings.”
Good
It’s understandable for their residents to stash their money in crypto amid the mayhem. The hryvnia isn’t falling as much as the ruble, but it is getting hit. Crypto may be a decent option for some Ukrainians; the last thing they need is for their savings to be depreciated away as Vladimir Putin wages a bloody invasion of their country. Perhaps that’s a victory for crypto innovation.
Bad?
But if crypto is being used to dodge sanctions — and it certainly stands to reason that it’s happening to some extent — there’s no way that activity is good for assets like Bitcoin.
The White House’s National Security Council and the Treasury Department have solicited the help of crypto exchanges to stop such transactions.
Ultimately, dodging sanctions will do nothing to help the crypto industry make friends in Washington.
Skeptics in Congress and at regulatory agencies frequently cite crypto’s illicit use, but there’s significant debate over whether the mainstream digital currencies are truly useful for criminals at all because the radical transparency of technology like the Bitcoin ledger facilitates tracking.
To be sure, Chainalysis says the transparency of the blockchain makes it likely that bad actors will get caught, and specifically sanctioned people probably moved their money well in advance of the sanction announcements, but it’s hard to underestimate the brazenness and stupidity of some criminals.
Price increase could keep going for several days or more, but the illicit funds impact maybe so mall that no need to consider at this moment.
If we really want to boost crypto broader adoption, it will be required crypto should be supportive for human kind and not easy to be utilized dodging any legal policy.
Source: Bloomberg