Russia-Ukraine conflict and your Alts – 19 Feb 2022

Is BTC indeed the safe heaven in crypto space?

Everyone talks about Bitcoin, assuming alts gonna act proportionally to BTC movement on such uncertain periods. Some claim BTC is the safe heaven on these times.

Well… they’re both wrong:

Three phases of this crises – where did the money go?

The truth is – there are two levels of uncertainty on this game.

Lets look at the photo above, depicts BTC movements during the past ±36 hours.

BTC in blue, doing what it suppose to do, going down when US market go down, while US market do what they suppose to do – go down when Putin starts doing some monkey business on the Ukraine border.

Yeah it sucks. US market shouldn’t be so fragile. And BTC should be the decentralized money, decoupled from the corrupted financial system, and actually do the opposite in times of global tension, however this is what happens when institutional money flows in, they treat it like yet-another-shitty-Nasdaq-stock they hold. Be careful what you wish for, institutional money adoption is no only good news (market manipulation, crash after each FED announcement, etc.)

However this is not the main point here – not even close: while total market cap flow with BTC (the cyan color), and also total market cap excluding BTC doing the same thing (yellow color) – the BTC.D (BTC Dominance, orange color) is going wild!

The final cut

Again: total market cap with BTC and without BTC are correlated, while BTC Dominance isn’t. What does it mean?

It means we have have two types of crashes here –

  1. On the left side of the chart, where BTC.D correlated the other factors – it’s just money flowing from BTC to fiat and from BTC to stablecoins. That’s why BTC.D is down – money goes to ‘alts’, however not to shitcoins, it’s going to Tether, USDC, UST, DAI… That’s the real safe heaven…
  2. On the middle of the chart, BTC.D breaks this correlation – that’s when Russian-Ukrain news get absorbed already in the market (fear growth stopped), no more rumors of huge moves, just the real news about local tension. BTC.D founds the bottom, while other indicators – didn’t…
  3. Right side of the chart, BTC.D jumps, while other factors going almost flat and sideways – that’s the sad side of the story here: the money that went to fiat already, won’t come back soon, hence the market cap doesn’t change much. Stable coins went back to BTC but not totally back to alts…


  1. “this is what happens when institutional money flows in, they treat it like yet-another-shitty-Nasdaq-stock they hold.”

    This hits the nail on the head. Bitcoin is quite superior to gold for what people in the Ukraine, especially its central bank, need right now — a store of wealth that can readily escape across borders. But ignorant institutional noise about Bitcoin as a “risk asset”, rather than the more accurate view of Bitcoin as protection against many risks, has quite buried such fundamental facts when it comes to market action.

    1. I agree, and eventually this is what happens. However meantime we’re correlated to US stock market.

      BTW the other side of this conflict (Russia) also has some interest in BTC now, in order to avoid dependency on US due to expected sanctions.

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