(Bloomberg) — Bitcoin dropped below $38,000 on Monday as global markets tumbled on concerns that Russia’s invasion of Ukraine, and the spiraling commodities prices it unleashed, could have a wider and longer-lasting impact than previously thought.
The largest cryptocurrency fell as much as 3.7% to $37,596 early Monday in Asia, its lowest level in a week, before recovering slightly. Ether declined as much as 4.6% to $2,508.80, the lowest since Feb. 24. Other top tokens like Solano, Cardano and Avalanche also fell, according to pricing from CoinGecko.
Bitcoin has now given up all of the gains it notched up early last week, and is again trading broadly in line with other risk assets. Monday’s losses came as oil soared on concerns the U.S. and its allies might prohibit Russian oil imports, putting more upward pressure on already elevated inflation.
Read more: Oil Shoots to $130 as Chance of Russian Ban Spurs Crisis Fears
For most of this year, Bitcoin has been trading sideways, failing to sustain any advances above $45,000. Edward Moya, senior market analyst at Oanda, wrote in a note on Friday that “Bitcoin’s broadening formation could see selling pressure look to test the $37,000 area.”
The decline in cryptocurrencies mirrored a broad selloff across Asian stock markets on Monday, which saw Hong Kong’s Hang Seng Index slump 3.6% and Japan’s Nikkei benchmark drop 3%. Russian President Vladimir Putin said on Sunday the war will continue until Ukraine accepts his demands, pummeling hopes for a quick resolution.
With Russia’s invasion nearing the two-week mark, a debate has been raging about whether cryptocurrencies are a hedge against increasing willingness among governments to seize financial assets — or a convenient sanctions-evasion tool that needs stricter policing.
Lloyd Blankfein, the former chief executive officer of Goldman Sachs Group Inc., in a tweet late Sunday said crypto prices currently don’t appear to support the former argument.
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