Situations have been pretty tense amongst Russia, Ukraine, and other nations ever since Russia began the invasion process on Ukraine. With different sanctions that are arriving from the United States of America along with the other NATO nations that are allied, it is not very clear at this moment how the local sector of Bitcoin as well as the broader market is going to be impacted.
However, the crypto mining activities that are taking place in Russia have had no negative impact and continue a smooth operation at the moment.
The Russian miners of BTC or Bitcoin are apparently running pretty smoothly at the usual pace, according to current news of cryptocurrency. This is the case despite having the government of Russia attempt to invade Ukraine. Going by the estimates that have been made by the Cambridge Bitcoin Electricity Consumption Index, the mining activities that take place in Russia account for about 11.2% of the entire hash rate of Bitcoin all over the world. So, with the sanctions coming in from different nations allied with Ukraine, there is a doubt whether the broader markets of Bitcoin and other sectors will be impacted or not.
There are certain mining firms like Flexpool that is Ethereum-based that have specifically halted the operations that they had in Russia as a response to the invasive operation on Ukraine by Russia.
The Bitcoin miners who are called Compass Mining have made a confirmation to the different customers that are currently hosting in Russia that the infrastructure of mining will not be closed and will continue to remain operational even during the tense situations between Russia and Ukraine.
This comes as a relief to the Bitcoin miners in Russia since most people have made a lot of investments into the cryptocurrency.
Compass Mining CEO Whit Gibbs has expressed his thoughts as well prayers to all affected by the conflict, on Twitter earlier today, as he reassured the community that its facilities in Eastern Europe are located safely in Serbia, well outside any “geopolitical unrest.”
Financial Sanctions to Be Imposed by US Government on Russia
The Biden administration outlined on Thursday that it would be imposing “sweeping financial sanctions and stringent export controls” on Russia’s top financial institutions, the government, high-ranking officials, and the technology sector.
Notably, it appears that the heavy restrictions won’t yet extend out to the international payments network SWIFT or cryptocurrency transfers. Many onlookers have argued that this could be a time in which the Russian crypto sector flourishes as it could soon become an important tool to sidestep various sanctions.
In a newsletter to investors earlier today, BTC bull and Morgan Creek digital co-founder Anthony Pompliano emphasized that the Russian government could use this moment as a chance to shift away from the US dollar reserve system, and back a decentralized currency with a global appeal: “This game theory leads us to Bitcoin.
The next best option to being the producer and distributor of the global reserve currency is to be the most advanced user and holder of a global reserve currency that no single country controls.”
“That incentive leads these superpowers to realize that Bitcoin will be essential for decades to come. The countries that have a large ownership stake, along with conducting mining and other pro-bitcoin activities within their country, will have a significant advantage,” Anthony said.
VanEck’s head of digital assets research Matthew Sigel has also expressed similar opinions to Bloomberg, making a note that the particular Bitcoin network will allow Russia to decrease the possible harm that is caused by being shut out of the Western financial system: “Neither dictators nor human rights activists will encounter any censor on the Bitcoin network.”