© Reuters
Investing.com – Russia’s invasion of Ukraine could cause more people to turn away from the dollar, which could favor local cryptocurrencies and fiat currencies, according to billionaire Mike Novogratz, who has always been a fan of cryptocurrencies.
The recent surge in bitcoin exchanges using Russian and Ukrainian hryvnia has bolstered the case for advocates of this decentralized currency, which can provide a safe haven when access to traditional banks is broken. The invasion and sanctions against Russia could push more ordinary people into crypto, Novogratz said while clarifying that this does not mean the currency is being used to avoid sanctions.
“We have never seen a group of nations essentially confiscate real estate from Russian tycoons,” the founder of Galaxy Digital Holdings said in an interview. “It sends a message: I want to have money that lives outside of traditional power. That’s why bitcoin was created, because people don’t trust governments.” In contrast, blockchain ledgers are transparent.
The world’s largest cryptocurrency has decoupled from risky assets over the past two days, fostering tales that the coin could be seen as a store of value, uncorrelated to the broader market. Although still high at 0.55, bitcoin’s correlation with the has retreated from the high of 0.7 reached earlier this year.
Some analysts credit sanctions against Russian banks, corporations and wealthy elites – and the resulting economic fallout – as driving the digital asset rush. For observers like China, there are lessons to be learned from reliance on the U.S. dollar, Novogratz said.
“I’ll tell you one thing, you’re going to sell your reserves before invading Taiwan,” he said. “It’s a big deal, in many ways. It’s the start of accelerating the de-dollarization of the world.”
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