The volatility in the cryptocurrency market reflects high levels of uncertainty among investors. After a week of ups and downs, that although there have been quite interesting events that show acceptance and important developments for the various crypto assets in the world, the conflict between Russia and Ukraine has investors very nervous, since a possible invasion could take place, which would be chaotic for the financial markets.

There is no doubt that Ukraine has stolen the world’s attention in recent days, as its conflict with Russia seems to be increasingly worrying. There are rumors about a possible invasion by the Russian country, after the impact of a projectile was reported in the Donbas region, which managed to tear down several buildings in the area. The cryptocurrency market has suffered the fear among investors in this situation, since last Wednesday the markets fell severely, losing more than 5% of its value. A conflict of this magnitude could generate a quite strong contraction in the financial markets in the short term, especially if we talk about the stock and cryptocurrency markets. However, the crypto market could serve as a long-term refuge for investors in case the conflict begins to cross borders, which of course we hope will not happen.

Despite everything already mentioned, the Ukrainian country has officially legalized the use of Bitcoin in its country as a payment method, so that citizens can purchase goods and services using the cryptocurrency. It is worth mentioning that it is a different situation than the one that occurred in El Salvador, since in the case of the Central American country Bitcoin was declared as legal tender, and in this case it will only serve as a payment alternative.

Now let’s talk about the counterpart in the conflict, since the Russian country has announced through the Russian Ministry of Economic Development a proposal to significantly reduce taxes generated by mining activities in cryptocurrencies. In addition, they would seek to develop a strategy to encourage investment in this type of activities. It is curious how the perspective of crypto assets has changed radically in the Russian country, since even its finance minister, Anton Siluanov, declared that banning cryptocurrencies would be like banning the internet. In other news, Twitter has added a feature to send tips to content creators on Ethereum, just as it did with Bitcoin since last September (2021). The interesting thing is that, not only you are able to send tips with Ether, but also with all currencies based on the Ethereum network (ERC-20), including some stablecoins. The American financial company, J.P. Morgan, has joined the companies that decided to join the Decentraland metaverse, after they announced the opening of their virtual office, called “Onyx Lounge”, located in the “Metajuku Mall” within one of the most important metaverse platforms in the business field. With this, the American firm has become the first bank to be part of the metaverse. The week before, Google included the conversion rate of Cardano against the US dollar in its search engine. Cardano, one of the most popular cryptocurrencies with the greatest projection, has generated a lot of expectations among investors after various projects and integrations that could revolutionize its project in 2022.

Attention crypto investors, the president of the United States, Joe Biden, would be giving an executive order related to cryptocurrencies this week, so there could be great volatility and strong movements in case we see surprising results. This order will establish a regulatory framework for cryptocurrencies and other decentralized assets. In addition, the possibility of creating a digital US dollar is being evaluated. It is worth mentioning that the previous week the governor of the state of Colorado, Jared Polis, announced that in the middle of this year citizens will be able to pay taxes using their cryptocurrencies, which the government itself will later re-convert into fiduciary money. Great speculation regarding the future of cryptocurrencies in the United States, so we will have to be aware of Biden’s statements and of course also the Federal Reserve. Adding a bit of optimism with another piece of news, the Central Bank of Spain has recognized Bit2Me as the first official cryptocurrency exchange, granting it the title of service provider for exchanging digital currency for fiat currency, as well as custody of electronic wallets. Bitcoin is above $38,000, an area in which it seems to be generating quite an interesting floor. It will be vital to observe the behavior of the asset in this zone, since if it bounces there it could return to $40,000. Something very similar to Bitcoin is happening on Ethereum, as it appears to be starting to bottom out near $2,600, currently trading above $2,700. However, no recurring support level is seen until $2,400.

Although there is great tension and uncertainty in the face of various events around the world, the projects that support cryptocurrencies have shown quite significant progress so far in 2022, so in the long term the outlook looks quite interesting. However, some critical situation, such as a possible war, could reflect short-term panic, so it will be important to manage our risks when investing. Without further ado, we wish you an amazing week.