The global crypto market capitalization had been below USD 2 trillion since the value of BTC hit its all-time high of USD 69,000. The capital controls in Russia and sanctions affecting the ruble are the primary drivers of cryptocurrency prices.
The total crypto market capitalization is above USD 2 million as Bitcoin (BTC) is approaching USD 45,000 again. That has not been the case since August when the price of the pioneering cryptocurrency reached its all-time high of USD 69,000.
The rise in the price of Bitcoin has already exceeded 17% in the last seven days. Meanwhile, Ethereum (the second-largest cryptocurrency by market capitalization) has accumulated 12% in the same period.
As of this writing, BTC is trading at around USD 39,624 and has accumulated a 0.2% gain in the last 24 hours. Its daily trading volume is above USD 16.53 billion, and its market capitalization is about USD 750.28 billion, according to CoinGecko.
The Cryptocurrency Demand in Ukraine and Russia Causes the Rally
Analysts agree that capital controls in Russia and sanctions affecting the ruble are the primary drivers of cryptocurrency prices.
A short squeeze partly caused the sudden rally, but the movement and considerable buying volume in Russia continued. That indicates that citizens of the Eurasian country are using cryptocurrencies to evade the consequences of the conflict with Ukraine.
There was also an increase in demand for crypto assets on exchanges like Binance from Ukrainian citizens. However, local foreign exchange markets interrupted their activities significantly after the Central Bank of Ukraine temporarily halted the withdrawals of foreign currencies. That situation contributed to the drop in the value of the local fiat currency (hryvnia) to lows against the US dollar.
Altcoins Take Advantage of the Positivity in the Crypto Market
Although the rise in the price of Bitcoin led to the increase in the total crypto market capitalization, other cryptocurrencies also supported the rally.
The price of LUNA, the native token of the Terra network, has increased by 56.6% in the last seven days to trade at USD 93.64. Its market capitalization reached USD 2.66 billion, and it occupies 7th place in the ranking of cryptocurrencies.
BNB, Solana (SOL), and Polkadot (DOT) also stood out with gains between 12% and 16% in the last seven days. Those altcoins are trading at around USD 385.12, USD 89.96, and USD 17.37, respectively.
Of course, the rise in the market capitalization of Bitcoin has been the most prominent and now exceeds the ruble. The capitalization of BTC is around USD 835 billion, while the Ukrainian fiat currency fell to USD 626 billion.
The price of Bitcoin has historically served as a reference for the rest of the cryptocurrency market. However, the conflict between Russia and Ukraine now leads citizens of the Eurasian country to seek cryptocurrencies to circumvent international sanctions. Leading exchanges disagree with the sanctions against all Russians, as many citizens do not support the attacks.
By Alexander Salazar
