Stock market collapses after Putin’s partial mobilization

After the severe setbacks in eastern Ukraine, Russian President Putin is responding with a counteroffensive: Russia is sending more soldiers into the invasion war against Ukraine. In a televised address, Putin announced partial mobilization. The call-up mainly affects reservists and veterans who have previously served in the Russian armed forces. A total of 300,000 soldiers are said to be ready for action on Ukrainian soil.

This is also leaving its mark on the Russian stock market: The partial mobilization is causing the biggest slumps since the beginning of the war on the largely isolated stock indices MOEX and RTS. At the top, the price losses reached 9.6 and 11.7 percent today. At the time of writing, the deficits stand at 4.1 and 4.5 percent. The sale already started at the beginning of the week. The reports of referendums in the so-called “people’s republics” of Luhansk and Donetsk, as well as the Cherson and Zaporizhia regions about joining Russia, further fueled the panic on the Russian markets.

Are Sanctions Driving Russia Towards Crypto?

Meanwhile, the “West” continues to increase its sanctions against Russia. Just last week extended the EU extends its restrictive measures by a further six months. Among other things, the US Treasury Department targeted crypto wallets belonging to a Russian neo-Nazi militia. Partial mobilization should pave the way for further sanctions.

As a result of increasing isolation, the Russian government is looking for ways to circumvent western sanctions. Since the beginning of the war there have been repeated reports of attempts by Russia to enter the crypto space. For example, the country is working on a blockchain-based alternative to the SWIFT system. Most recently, the Kremlin planned to legalize cryptocurrencies for international trade. Companies should be given the freedom to reported the Russian news agency Interfax.

In addition, Bitcoin Magazine is currently reporting that Russia is mining Bitcoin in “energy-rich regions”. want to legalize. “Let them make money,” says the chairman of the finance committee of the Russian Congress.

Should Russia actually advance more towards crypto, this would undoubtedly have consequences for the sector. Further bans on mixing service providers such as Tornado Cash or Blender.io would be conceivable. A senior official at the US Treasury Department had indicated a corresponding step at a hearing before the Senate.

A Russian push towards crypto space could also damage the already tarnished reputation of Bitcoin and Co.