Bitcoin extended a two-day rally, leading broad-based gains in cryptocurrencies as digital assets reasserted themselves as haven assets — and emerged as a potential vehicle for getting around sanctions — amid the intensifying war between Russia and Ukraine.
The largest digital coin by market value rose as much as 8% Tuesday to $44,964 in New York trading hours, with its rally over the past two sessions adding 20% to its market value at one point and its total market capitalization crossing above $840 billion once again. Other cryptocurrencies also advanced, with Ether crossing above $3,000. It also broke above its average price over the last 50 days, typically seen as a bullish development.
Analysts watching the market say the stunning breakthrough can be ascribed to the idea that cryptocurrencies could act as a type of refuge as the war in Ukraine intensifies. Its appeal lies with the fact, the argument goes, that cryptocurrencies are detached from governmental control and therefore not beholden to any of their actions.
Bitcoin “has gold-like properties in that if you hold it you directly control the assets as opposed to governments and banks being in between,” said Stéphane Ouellette, chief executive of FRNT Financial Inc. “In a period where banking is destabilized in a region, which is obviously happening in Europe right now, it would make sense to see some flows into BTC as people diversify away from the banking system,” he said, adding that speculators can get in front of such trends, which can drive prices higher.