Bitcoin Moves Higher as Ether and Stocks of Coinbase and Robinhood Fall Amid Rising Ukraine-Russia Tensions

The price of the flagship cryptocurrency was last higher by less than 1% at $92,003.28, according to Coin Metrics, just below the all-time high of $93,469.08 reached last week.

Bitcoin rose Tuesday even as other riskier assets such as ether and meme stocks sold off, following reports that Russian President Vladimir Putin warned the U.S. that the threshold for the use of nuclear weapons had come down.

Bitcoin was last higher by less than 1% at $92,003.28, not far from the all-time high of $93,469.08 reached last week. Ether fell more than 1%, according to Coin Metrics.

Shares of MicroStrategy rose 3%, while Coinbase and Robinhood were both under pressure. Both stocks benefit from the trading of other, non-bitcoin assets across the crypto market.

Investors reacted overnight to reports from the state-run Tass news agency that Putin warned the U.S. that the threshold for the use of nuclear weapons had come down in response to President Joe Biden allowing Ukraine to use U.S. missiles to strike military targets inside Russia.

“The threshold for the use of nuclear weapons is decreasing,” Putin said in the interview, which was conducted last week and aired Monday evening Moscow time.

Rising geopolitical tensions between Ukraine and Russia helped propel bitcoin and other crypto assets to outsized gains in 2023 and early 2024, as investors sought out riskier assets in the face of soaring inflation and the Federal Reserve keeping interest rates near zero.

Bitcoin has recently benefited from enthusiasm for cryptocurrencies after the U.S. presidential election. That drove bitcoin to fresh records and sent smaller crypto assets soaring. Like gold, crypto assets are seen by many investors as a “non-confiscatable,” long-term hedge against geopolitical uncertainty.

“The most significant long-term correlations for bitcoin are a negative correlation with the U.S. dollar and a positive correlation with money supply growth,” Matt Sigel, head of digital assets research at VanEck, said Oct. 28 on CNBC’s “Squawk Box.”

“Bitcoin is a chameleon,” Sigel added. “Its correlations change over time; it’s hard to predict what it’s going to be correlated with over the short term.”

Bitcoin has behaved as a safe haven before. It outperformed during the crisis in the regional banking system in early 2023, for example. But because bitcoin is also a risky asset without a long history, with extreme volatility that can benefit short-term traders, some have a hard time arguing that bitcoin is necessarily attractive forever. Citigroup, for example, in a note Monday reiterated the bank’s view that bitcoin doesn’t exhibit store-of-value properties.