How Russia’s invasion is impacting the market and crypto prices

As the Eastern European political landscape remains uncertain with Russia’s invasion into Ukraine, if harsh sanctions are placed on Russia, it could have a major impact on Russian retail savings.

According to Nikolai Arefiev, a member of Russia’s Communist Party and vice-chairman of the Duma’s committee on economic policy, the savings of Russian savings could be siezed by the state as a result of sanctions placed against the country. Should the West sanction Russian, the government could take around $750 billion USD worth of rubles (approximately ₽60 trillion) worth of savings. Arefiev noted that Russia has over $640 billion USD worth in gold and foreign exchange reserves outside of the country. If foreign funds are blocked, the savings of the population will be needed by the country:

“If all the foreign funds are blocked, the government will have no other choice but to seize all the deposits of the population, or 60 trillion rubles in order to solve the situation.”

Arefiev also noted that the threat of sanctions against Russia will likely include SWIFT and other foreign exchange prohibitions. Additionally, the European Union as sued, fining Russia $290 billion USD for import substitution.

Local media reports that Russian state-backed bank Sberbank issued a statement saying that it was on the list of sanctioned institutions by the US, but soon after removed the notice and stated that it was issued as a bug on the website and that all systems are operating as normal. According to the bank, clients and institutional firms have full access to funds and that there are developments in place to protect the funds and interests of their clients.

To add to the tension, the Russian Ministry of Foreign Affairs stated that it would respond “strongly to these sanctions”:

“Make no mistake, we will respond strongly to these sanctions, not necessarily in a symmetrical manner, but the response will be well calibrated and will not fail to affect the United States.”

“Make no mistake, we will respond strongly to these sanctions, not necessarily in a symmetrical manner, but the response will be well calibrated and will not fail to affect the United States.”

From Russia’s foreign ministry.
Is this a threat of cyberwar?https://t.co/waxvbrE5E1 pic.twitter.com/AVnYoLLtqd

— Balaji Srinivasan (@balajis) February 24, 2022

Russia invades Ukraine, the economic implications

The global cryptocurrency and stock market took a nosedive after the Russian President Vladimir Putin announced that the Russian army would conduct a special military operation in Ukraine. The Russian army launched a missile attack on several regions in Ukraine, including the capital of Kiev and Kharkiv.

Cryptocurrency values with Russian invasion

Volatility across the market has spiked with Bitcoin dropping over 8.8% to $35,536 USD at the time of writing. Ethereum has plunged by 12.4% in the past 24 hours to $2,406.43 USD and the overall market capitalisation of the cryptocurrency industry has dropped by 8.25% to $1.58 trillion USD.

It’s not just the cryptocurrency market that has taken a massive knock. Stocks are shares across industries are facing volatility with the S&P 500 and the Dow Jones Industrial Average dropping nearly 2% in the last hour. The price of oil spiked as a result of the invasion to $99.50 USD. As the world’s third-largest producer of oil, Russia’s actions are already showing a major impact on markets.

Vitalik Buterin, the Russian-Canadian co-founder of Ethereum co-founder, took to Twitter to show support for the Ukranian people. His tweet, written in Russian, translates to:

“Very upset by Putin’s decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead. This is a crime against the Ukrainian and Russian people.

I want to wish everyone security, although I know that there will be no security.

Glory to Ukraine.”

Очень расстроен решением Путина отказаться от возможности мирного решения спора с Украиной и вместо этого начать войну. Это преступление против украинского и русского народа.

Хочу желать всем безопасности, хотя знаю, что не какой безопасности не будет.

Слава Украине.

— vitalik.eth (@VitalikButerin) February 24, 2022