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Distributed Ledger: Bitcoin, ‘digital gold’ or ‘the ultimate risk asset’? Ukraine invasion puts the crypto’s long-term value to the test

Hello! Welcome back to Distributed Ledger, our weekly crypto newsletter that reaches your inbox every Thursday. I’m Frances Yue, crypto reporter at MarketWatch, and I’ll walk you through the latest and greatest in digital assets this week so far. Find me on Twitter at @FrancesYue_ to send feedback or tell us what you think we should cover.

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Crypto in a snap


lost 14.8% over the past seven days, recently trading near $36,000. Ether

posted a 18.6% loss for the seven-day stretch, trading at around $2,440. Meme token Dogecoin

declined 18.3% to around $0.12, while Shiba Inu

was trading 25.5% lower from seven days ago at around $0.000023.

Crypto Metrics

Biggest Gainers


% 7-day return












Magic Internet Money



Source: CoinGecko as of Jan.20

Biggest Decliners


% 7-day return






Convex Finance






Theta Network



Source: CoinGecko as of Jan.20

Bitcoin as safe havens?

Bitcoin is trading near $36,000 on Thursday, after it fell to as low as $34,338, the lowest level in a month, as Russia attacks on Ukraine

“Should this momentum continue, we will be visiting the $32,000 area in the short term where there is a lot of established support,” Matthew Dibb, chief operating officer and co-founder at crypto asset manager Stack Funds, wrote to Distributed Ledger in an email. 

But why, exactly, did bitcoin fall? Analysts hold different views.

According to Sam Bankman-Fried, chief executive at crypto exchange FTX, the latest selloffs are primarily driven by algorithmic investors, who study past data and find that bitcoin posted a relatively high correlation with technology stocks for the past few months, as investors expect the Federal Reserve to tighten its monetary policy aggressively.

However, based on fundamentals, “I’m not really sure I would have guessed it would go down,” Bankman-Fried wrote on Twitter. “There are arguments both ways for what should be happening to BTC right now.” 

As the war breaks out, “people have less free cash,” which contributes to sell-offs in bitcoin and stocks, Bankman-Fried wrote. On the other hand, as Eastern European currencies become less stable, investors may turn to alternatives such as bitcoin, according to Bankman-Fried.  

Some other analysts argue that the latest selloff shows that the narrative of seeing bitcoin as a store of value has fallen apart.

“Bitcoin is the ultimate risk asset,” Craig Erlam, senior market analyst at OANDA wrote in an email to MarketWatch. “Risk-aversion has swept through the markets with investors favoring traditional safe havens. There have been times before when it has been suggested that bitcoin could fulfill this role but it has become increasingly evident that this is not the case.”

Gold surged on Thursday after Russia launched the invasion in Ukraine. April gold futures


were up 0.8% on Thursday to around $1,924 an ounce, after touching a high of $1,976.50 — the highest for a most-active contract since September 2020, according to FactSet data.

The 24/7 trade

As bitcoin trades 24 hours, seven days globally, it reflects investor sentiment on a real-time basis. 

“We are observing bid and offer flow move almost instantly with every new headline in a ‘reactive manner’,” Stack Funds’s Dibb said. 

“This creates an interesting dynamic particularly on weekends when traditional markets are closed as the moves can be highly exaggerated, more so during periods of low liquidity,” Dibb said. 

Bitcoin trading volumes on spot exchanges on Sunday and Monday, when the U.S. markets were closed, were 25% and 23% higher than normal, respectively, according to bitcoin company NYDIG. 

“When fund managers were looking at, hey how can I direct my book right now, in a volatile long weekend where I don’t have access to many markets, they’re saying, oh, bitcoin, I can sell it 24/7 and it’s pretty liquid,” Katie Talati, director of research at crypto asset manager Arca told Distributed Ledger in an interview.

Crypto companies, funds

Shares of Coinbase Global Inc.

traded down 1.5% to $170.33 Thursday afternoon. It was down 11.4% for the past five trading sessions. Michael Saylor’s MicroStrategy Inc.

traded 0.3% lower on Thursday to $367.3, and has lost 9.5% over the past five days.

Mining company Riot Blockchain Inc.

shares went up 0.8% to $15.25, with a 14.6% loss over the past five days. Shares of Marathon Digital Holdings Inc.

gained 1.9% to $21.4, and are down 16.7% over the past five days. Another miner, Ebang International Holdings Inc.
traded 7.5% lower at $1.17, with a 16.4% loss over the past five days. Inc.

traded up 9.9% to $49.28. The shares went up 16.9% over the five-session period.

Block Inc.

’ s  shares are up 0.9% to $89.56, with a 14.1% loss for the week. Tesla Inc.
shares traded up 0.2% to $765.35, while its shares logged a 12.8% loss for the past five sessions.

PayPal Holdings Inc.

lost 0.4% to $100, while it recorded a 5% loss over the five-session stretch. NVIDIA Corp.

lost 0.3% to $224.5, and was looking at a 8.7% loss over the past five days.

Advanced Micro Devices Inc.

inched up 0.3% to $109.91, while it lost 2.1% over the past five trading days, as of Thursday afternoon.

In the fund space, ProShares Bitcoin Strategy ETF

was 4.3% lower at $22.64 Thursday, while Valkyrie Bitcoin Strategy ETF

was down 4% at $14.06. VanEck Bitcoin Strategy ETF

fell 4.4% to $35.34.

Grayscale Bitcoin Trust

was trading at $24.64, off 3.9% Thursday afternoon.

Must Reads

Russia Could Use Cryptocurrency to Blunt the Force of U.S. Sanctions (New York Times)

Tether Slashes Commercial Paper Holdings by 21% (CoinDesk)

Crypto Winter Seen Weighing On Coinbase Quarterly Results Again (Bloomberg)

Sotheby’s Withdraws Sale of 104 CryptoPunks at Seller’s Request (Penta)

Exclusive: Austrian Programmer And Ex Crypto CEO Likely Stole $11 Billion Of Ether (Forbes)

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