Geopolitics puts Bitcoin to the test – what now?
Geopolitical issues such as the mounting Ukraine-Russia tensions, will fuel Bitcoin’s increasing mass adoption and higher values in 2022. Even with the 5% decline over the weekend.
Looking back over the past few weeks, serious geopolitical risks have shown real-life use cases for Bitcoin and cryptocurrencies in incredibly volatile times.
As I was quoted by Forbes and Tech Telegraph, amongst other media, according to research, donations in Bitcoin have been flooding into non-governmental organisations and volunteer groups in Ukraine. These donations are being used to fund military and medical supplies for the Ukrainian army.
In the meantime, Russia is planning crypto regulation, with legislation, including tax standards, expected next week.
Both Russia and Ukraine are aware that Bitcoin and cryptocurrencies can circumnavigate traditional financial institutions that may block transactions, with crypto being decentralised.
Whereas elsewhere, we’re seen that when raising funds in crypto, it’s much harder to confiscate them.
The decision made by GoFundMe to remove the donation campaign for the Canada ‘Freedom Convoy’ trucker protest from its site and return the millions of dollars back to the donors was viewed by many as being down to political over-reach.
However, in response, several crypto aficionados set up a crowdfunding campaign on the Tallycoin platform as an alternative way to raise money for the protestors.
Nevertheless, despite these recent use cases, Bitcoin has fallen in value by 5% over the weekend. Why is this?
This was sparked by a wider risk-off sentiment that also affected many areas of global stock markets. Indeed, like the crypto market, there was also highs and lows in stock markets. However, over time we’ve seen that the long-term trajectories are predictable for both: they go up.
Looking back to Friday, The Dow Jones Industrial Average fell 1.4%, the broad-based S&P 500 dropped 1.9%, while the tech-rich Nasdaq Composite Index declined 2.8%.
Bitcoin is widely considered as a store of value and medium of exchange. Yet these recent geopolitical issues have tested its other fundamental values of being a viable decentralised, tamper-proof, unconfiscatable monetary system.
These real-life use cases will further bolster Bitcoin’s mass adoption and lead to higher prices in 2022.