Bitcoin jumps 8% after the Treasury imposes new sanctions on the Russian central bank

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The logo of the Bitcoin cryptocurrency in a window of an office building in the Mitte district of Berlin, Germany, Tuesday, February 15, 2022.

Krisztian Bocsi | Bloomberg | Getty Images

The crypto market rose on Monday after the Treasury Department imposed new sanctions against Russia’s central bank.

Bitcoin jumped 8.2% to $40,959.30, while Ether rose 6.7% to $2,801.93. US stocks fell sharply earlier in the day before recouping much of their losses.

Sanctions unveiled by the Biden administration would effectively ban Americans from doing business with the Russian central bank and freeze assets in the United States.

The moves highlight the role crypto can have in military conflicts. The young asset class has never had the opportunity to show its potential importance in this type of environment before.

Since Thursday, when the Russian invasion began, transactions on centralized bitcoin exchanges for Russian ruble and Ukrainian hryvnia have hit their highest levels in months, according to crypto data firm Kaiko.

“The volume of RUB and UAH trading pairs has increased much faster than the volume of other pairs, such as BTC-USD, suggesting that the crisis is directly influencing trading behavior,” according to Kaiko.

Michael Rinko, venture capital partner at AscendEx, said $38,000 is the number to watch.

“It’s one of the biggest buildup phases,” he said. “You can find out the cost basis of each holder. More people bought at $38,000 than at any other level above or below for a good margin. This is a very key level because it can be downside support but also upside resistance.”

He also agreed that the dispute highlights the importance of bitcoin’s borderless and censorship-resistant qualities, but said that’s not why cryptocurrencies outperformed broader markets on Monday.

“This rise in crypto today may reflect rate hikes that are over priced,” Rinko said. “We are increasingly skeptical of the Fed’s ability and willingness to aggressively hike in this uncertain geopolitical environment.”

Yet, he added, bitcoin and other cryptocurrencies are still at an early stage where prices are mostly driven by narrative and do not underestimate the strength of the humanitarian case for bitcoin.

The Ukrainian government collected more than $10 million in cryptocurrency donations on Sunday, according to blockchain analytics firm Elliptic. Total crypto donations made to the Ukrainian government and military-supporting NGOs stood at around $16.7 million as of Sunday.

On Monday, Russian and Ukrainian officials met at the Belarusian border to discuss a possible end to fighting between the two sides. Officials from both countries have said there may be further negotiations ahead.

This first round is “the overarching event of the week,” according to Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank.

“This could determine bitcoin’s direction in the short term,” Hasegawa said. “If that fails, the price could extend Sunday’s loss and break below $37,000.”

Hasegawa added that bitcoin’s target range for the week is between $34,000 and $43,000.


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