Bitcoin (BTC) has risen 15% in the last 24 hours, defying the overall stock market downturn. This time yesterday, the world's largest cryptocurrency was trading at just $37,727 ($51,928 AUD), but it has now soared to $43,351 ($59,669 AUD) at the time of writing.
According to The New York Post, the rise can be explained in part by Russians seeking to flee the tumbling ruble, which is presently down more than 30% as a result of US and EU economic sanctions.
Marc Van der Chijs, the founder and CEO of First Block Capital, told The Washington Post that bitcoin was trading for $46,000 on Russian platforms on Monday afternoon — a $5,000 premium when compared to its US price.
“There’s not normally a difference [between the US & Russian bitcoin price] because there are arbitrage possibilities,” van der Chijs said. “That seems to indicate that this urge in bitcoin price is because of Russian buying.”
Contrastingly, Blockchain.com research chief Dr Garrick Hileman cautioned investors not to jump to conclusions — “We see some evidence of an increase in bitcoin-ruble volume,” further warning that the current price action may not be directly correlated with Russian buying.
Hileman added, "There's obviously a substantial spike there compared to what the average was previously." "Is it significant enough to change the price this much?" "I'm sorry, but I'm not sure."
It's also likely that bitcoin's recent rise is due to people converting fiat into cryptocurrencies in order to give to Ukrainian military and humanitarian efforts, which have raised over US$20 million ($27 million AUD) in crypto in the last five days.
Whether or not the recent rise is due to Russian demand for Bitcoin, cryptocurrencies continue to attract attention, both favorable and negative, as the conflict in Ukraine develops.
Mykhailo Fedorov, Ukraine's vice prime minister, called on cryptocurrency exchanges to prohibit Russian users on Monday.
Binance's representative told CNBC, "We are not going to unilaterally freeze millions of innocent customers' accounts." "Crypto is designed to provide people all across the world more financial freedom. To decide unilaterally to deny people access to their crypto would be a direct violation of the purpose of crypto."
While crypto investors and blockchain enthusiasts may be ecstatic to see some green on the charts once more, it's worth noting that this might be the start of the most contentious crypto rally to date.
If it is verified that the price spike is due to increased Russian demand, it will attract a lot of unwanted attention from regulators and governments all over the world attempting to put a stop to it.
