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Sanctions on Russia had nothing to do with the recent Bitcoin rally

Bitcoin’s (BTC) price soared above $44,000 earlier this week amid allegations that fresh US sanctions against Russia were to blame. However, fresh research suggests that claims that Russians are circumventing sanctions by using cryptocurrency are without confirmation.

The value of ruble-denominated crypto activity on March 3 was $34.1 million, according to statistics from blockchain analytics firm Chainalysis. This was down 50% from the $70.1 million in activity a week ago on February 24. In May 2021, the amount of ruble-denominated crypto activity reached a new high of $158 million. Chainalysis’ senior director of communications, Madeleine Kennedy, says:

“This is a fraction of the volume that was seen during the all-time highs of Russian crypto trading volume reached May 2021″.

According to Citigroup data, actual Bitcoin purchases from Russia were only 210 BTC per day on average. As a result, Russia’s purchasing power appears to have little effect on the cryptocurrency market. Citi analysts, including Alexander Saunders, write in the Wednesday report:

“Russian volumes have been relatively small so far, suggesting that the price action is more due”
“to investors positioning for an expected uptick in demand from Russia, rather than Russian”
“demand itself. It will take meaningful capital flight to move the needle.”

Russian military carried out a massive bombing outside Europe’s largest nuclear facility, Zaporizhzhia, on Thursday, increasing their war on Ukraine. The cryptocurrency market reacted quickly, and it is already down 5% in the last 24 hours.

Bitcoin (BTC) is currently trading at $41,323 with a market capitalization of $785 billion, down 5%. Along with Bitcoin, all of the top ten altcoins have had a healthy correction ranging from 5 to 10%.
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