Bitcoin extended its losses on Friday, falling below $40,000 with investors concerned about the worsening war between Russia and Ukraine, after Russian troops seized Ukraine's largest nuclear power plant.
cryptocurrency
USDBTC,
was trading Friday afternoon New York time at around $39,844 or down 5.4% over the past 24 hours, according to data from CoinDesk.
russian troops occupied the largest nuclear power plant in Ukraine on Friday, after a fire sparked by his attack was extinguished. U.N. and Ukrainian officials said no radiation was released, Associated Press reported.
Bitcoin prices have shown a relatively high correlation with growth stocks over the past few months. US stock indices fell sharply on Friday afternoon. The Dow Jones Industrial Average
DJIA,
fell 1.1%, the S&P 500 index
SPX,
lost 1.3%, while the Nasdaq Composite Index
comp,
decreased about 2%.
Investors were also watching whether the United States and its allies would impose new sanctions measures against Russia. โWe should pay close attention to whether the Russian ruble can stop the slide against other major currencies amid intensifying financial sanctions on Russia, as another drop may drive bitcoin price higher as it did on Monday,โ Yuya Hasegawa, an analyst at crypto exchange bitbank wrote in Friday's notes.
David Duong, head of institutional research at Coinbase
COIN,
he wrote in Thursday's notes that crypto markets "will have to see a period of stabilization in the next two to three months before a more sustainable recovery can begin" as US monetary policy is now entangled with factors geopolitical.
"Before the invasion, we thought a recovery could come sooner, but we think investors now need more clarity on the timing of peak inflation and the Fed's hike cycle before they are willing to deploy more capital here." Duong wrote.
โSanctions on the Russian central bank have drained the global system of ~$300bn in reserve liquidity, which has the potential to hurt risk assets in the coming weeks,โ according to Duong.
Federal Reserve Chairman Jerome Powell said Wednesday that the central bank you intend to increase your policy interest rate by a quarter of a percentage point after the end of their March 15-16 meeting.
