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The recovery of Bitcoin and other cryptocurrencies after the outbreak of the war in Ukraine and Moscow’s sanctions has restored the appeal of digital currencies in the market after months of uncertainty (Bitcoin halved in value between November and January). The bet is that cryptocurrencies can become a real alternative channel to tap into Moscow’s foreign exchange reserves, in addition to the selective suspension of Swift and other sanctions. Advisors remain cautious about cryptocurrencies as an asset class. Cryptocurrencies remain a highly speculative asset that needs to be handled with caution.
Be careful with your wallet
Mario Allegra, investment manager at Alfa SCF, explains that the facts so far show only in a very limited way that cryptocurrencies can be a refuge for bank deposits, since they circulate through external channels and are subject to the risk of expropriation, business blockade or forced withdrawal to banking circuits. Therefore, we maintain an aloof view on cryptocurrencies, both for regulatory reasons and because of the inconsistency with our investment philosophy. The basis of our work is financial planning and the achievement of our clients’ financial goals, which has nothing to do with speculation. “
Action in the spotlight
Even among industry insiders, Russia is cautious about the impact of Bitcoin. Davide Capoti, CEO of Rocket Capital Investment, analyzed that Russia’s use of Bitcoin as a means of payment to circumvent Swift sanctions is a fascinating hypothesis, but it is difficult to apply. Most cryptocurrencies must be converted into fiat currencies to facilitate daily transactions, and the US dollar stablecoin is the main exchange rate used so far, so this problem cannot be solved. The second reason why this process is difficult is that the monitoring of blockchain transactions is very high. If billions of dollars worth of funds are transferred to unusual wallets, these activities can be easily tracked, and international authorities will intervene by requiring exchanges to blacklist wallets, especially if they can be traced back to sanctioned countries or activities. “
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