In the past, the crypto industry was a fun place to post memes and make jokes about how we're all going to be homeless when Bitcoin goes to zero. Some of the jokes and humour are still around but the industry is anything but a joke these days.
There have been numerous talks about Russia invading Ukraine. This is yet another saga in the conflict that has existed in that region for many years.
Nobody wants war and while everyone has been talking about the inevitability of it happening, I sincerely hope things don't escalate to that level. The tension in that part of Europe is boiling over, as Russia began an invasion of Ukraine.
I won't pretend like I know the whole story, and nobody outside Putin's and Zelenskyy's respective circles can give us a clear picture of the situation. However, what I know on the surface is that this is really looking bad.
From recent publications in the media, we know that Russia has declared to throw their weight behind two separatist nations inside Ukraine. Putin is basically saying, "hey Ukraine, you broke out of us, now we want to support people that want to break out of you".
In fact, in one of Putin's televised broadcasts, he described Ukraine as a country "created by Russia". So, in essence, Putin is saying, "I own your ass".
No matter how whimsical I try to portray this situation, it is anything but that. Past conflicts between Russia and Ukraine have been bloody, so we will not want a repeat of that.
In the meantime, what the media has described as a Russian invasion has also been counter described as "peacekeeping troops" sent into Ukraine from Russia. These troops had been building up presence at a Russia-Ukraine border for the past three years at least, so it's no joking matter.
The president of Ukraine, Mr Volodymyr Zelenskyy, was obviously rattled by this situation. He's asked the people of Ukraine to remain calm and also asked his allies to look into the matter.
Yeah, remaining calm is not going to be easy when thousands of elite Russian troops are in your backyard for "peacekeeping".
Russia has already been threatened with sanctions from the EU, Asia and a couple of other countries. Putin has responded with a resounding middle finger to everybody and true to his nature, he is pushing on with his decision.
War is bad for crypto
Lets face it, the threat of this kind of chaos will not bode well for crypto, stocks and similar assets. First of all, when life and death come into the conversation, cryptocurrencies become irrelevant.
Nobody gives a shit about how you're fixing the problems with banks when they could literally be bombing banks if the world falls into chaos.
This isn't time for taking risks, this is time to play it safe with calm heads. So, naturally, everyone is tending towards precious metals and of course, crude oil.
Bitcoin felt it somewhat as it shed $8k since that minor surge to $45K some weeks ago. If this conflict persists, we'll probably see cryptocurrencies shed even more value.
You're probably wondering why such a "small" conflict between two or potentially four countries is causing a global problem for crypto and stocks. The truth is in the details really.
First of all, it is a global issue as the United Nations, EU, and Uncle Sam have already gotten involved. Of course, Uncle Sam has something to say, it is not news that Russia and the USA have a longstanding beef that's portrayed numerous times in the media, movies and virtually every storyteller.
On top of that, there's also the little matter of China and their longstanding diplomatic understanding that will undoubtedly be tested by this conflict. As Russia faces the potential of sanctions, will China support them or will they side with the UN.....and USA?
Despite their anti-crypto stance in the country, China still has one of the largest crypto markets in the world. Chinese crypto investors are probably looking at this situation and thinking "oh shit, we're going to side with Russia and get cooked, gotta play it safe".
We already have three world powers preparing to go at each other's throats. Throw in another world power in the UK and probably Germany into the mix, and what we have here is a monumental clusterfuck just waiting to happen.
The crypto market and any asset that is perceived as "luxury" in perilous times will be kicked to the side. Gold, crude oil and similar assets will take centre stage because let's face it, these are necessities.
The world doesn't need another war, it doesn't need another conflict. If the lives of millions are in danger, web3, defi and all that stuff crypto is trying to fix will not matter. People will just want to eat and survive. I sincerely hope it doesn't get to that point.
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