This Week in Coins: Bitcoin Falls Amid Russian Invasion as LUNA Leaps Almost 50%

Even as armed conflict dominated headlines, crypto's push toward mainstream acceptance continued.

By Tim Hakki

On Tuesday, news that Russian President Vladimir Putin had formally recognized two breakaway states in eastern Ukraine—the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR)—caused Bitcoin to drop 5% in 24 hours. Other top cryptocurrencies—XRP, Cardano, and Solana among them—fell by as much as 12%

In the run-up to Putin’s declaration of war on Thursday, and in the immediate aftermath, crypto’s total market cap sank about 5% in 24 hours. Later that day, we reported on an eye-watering $200 billion drop to crypto’s total market cap—about 12% over 24 hours. 

The global crypto market has stabilized a bit since then, growing by about 1.2% overnight, according to CoinMarketCap. As of this writing, Bitcoin was down about 2% down from last Saturday, trading for $39,137. Ethereum, the second-biggest cryptocurrency by market capitalization, grew 1.5% over the last week and was trading for $2,774.

There were only a few big movers in the top 20 cryptocurrencies this week—Cardano and XRP each lost about 9% of their value over the last seven days, now trading for $0.90 and $0.76, respectively. 

The two Shiba Inu-inspired memecoins, Dogecoin and Shiba Inu, were both down around 10% this week, trading at around $0.1273 and $0.00002475, respectively, as of this writing.

Terra’s LUNA had the most explosive week by far, surging nearly 50% to $75. On Wednesday, LUNA posted overnight gains of 15%.

This week’s news

While most news cycles this week were dominated by the Russia-Ukraine situation, several stories also highlighted how crypto’s gradual progression into the mainstream continued.

On Monday, London-based law firm Gunnercooke became the first British law firm to accept cryptocurrencies as payment. The firm tapped crypto exchange Coinpass to facilitate transactions. 

That same day, the Bank of Spain’s governor, Pablo Hernandez de Cos, delivered an address in which he called for tighter surveillance of the industry. His justification largely centered on investors’ “limited understanding” of crypto, also citing concerns over volatility and environmental impact. 

Bloomberg reported on Tuesday that a group of states within the European Union, led by Germany, are pushing to include cryptocurrency firms within the remit of the bloc’s new anti-money laundering watchdog.

On Wednesday, the world’s largest custodian bank, BNY Mellon, announced it would be integrating software from Chainalysis, a blockchain analytics company, to help clients manage risk from Bitcoin investments. 

This isn’t the first time BNY Mellon has crossed paths with crypto. A little over a year ago, the bank announced it would start holding, transferring, and issuing Bitcoin for clients, and last July it was tapped by digital asset manager Grayscale to provide accounting services for Grayscale's Bitcoin Trust. 

On Thursday, the European Union added a provision calling for a ban on energy-intensive, proof-of-work crypto mining to a set of draft regulations. Enforcing the ban, if approved, would mean no more Bitcoin mining because of its relatively high carbon footprint. The EU is seeking to be carbon neutral by 2050.

Voting on the new legislation had been scheduled for February 28, but, as of Friday, it's been delayed over concerns that the draft package “might be misinterpreted as a de facto Bitcoin ban,” according to Stefan Berger, chairman of the European Parliament’s Economics Committee.

China’s supreme court on Thursday issued a ruling that paves the way for fines and lengthy jail sentences for citizens found guilty of fundraising with crypto.

Chinese authorities have waged an ongoing war against crypto since 2017. Last year, a state-wide crackdown on Bitcoin mining was a significant milestone. China also is rolling out its own electronic currency, the digital Yuan.