A note from JP Morgan yesterday highlighted that the outlook for crypto and stablecoins was very positive given that Russian citizens were increasingly adopting crypto as the ruble plummeted.
According to JP Morgan, the biggest bank in the US, crypto should see a lot more upside as stablecoins have seen a sharp uptick over the last week, and as Russian citizens start adopting cryptocurrencies in order to protect themselves from the collapse of the ruble.
In an article on Business Insider Australia, the bank states that it is seeing the stablecoin share of the crypto market shoot up to a record 10%. This generally implies that they will be used to buy cryptocurrencies.
The ever-increasing financial sanctions imposed upon Russia are having a very significant effect on the purchasing power of citizens. Also, banks in the country are experiencing disastrous runs. Shares in Sberbank, the largest bank in the country, spiralled down 99% in London trading, to be worth only one penny.
JP morgan gave the following reason for their belief that Russian citizens were adopting crypto:
“Ruble denominated bitcoin volume surged to nearly 1.5 billion RUB last Thursday on the day of the invasion with another spike on Monday, suggesting that some Russian citizens have been responding to the collapse of their currency by shifting towards crypto,”
The bank added that collapses in the currencies of other countries in recent history had also led to more adoption of cryptocurrencies by their citizens. Venezuela, Turkey, and Brazil, were highlighted by the bank as similar instances.
The bank sees Bitcoin as having similar, but even more advantageous hedging properties as gold.
“Bitcoin enjoys a special status in the current juncture as it represents the only cryptocurrency that is perceived as a substitute to gold and thus as a hedge to a catastrophic scenario,”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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