The war between Russia and Ukraine has pushed investors to rely on commodities such as gold and oil as a storage of value until the situation in the latter clears up.
There is a lot of debate around whether or not cryptocurrencies such as Bitcoin or Litecoin can be used as decentralized digital forms of storage of value. Bitcoin, specifically, is regarded as the modern, digitized version of Gold, and is often referred to as Gold 2.0. However, can Bitcoin and cryptocurrencies, in general, be used to preserve the value of funds in times of crisis?
1-year chart of gold price(Source: Business Insider)
As seen from the above chart, the price of gold has risen significantly during the Ukraine and Russia crisis.
1-year chart of Bitcoin (Source: CoinMarketCap)
On the other hand, the price of Bitcoin declined to almost half its all-time high set in the market within the last year.
Although the decentralization of cryptocurrencies has enabled them to enter the storage of value debate, their fluctuating prices are hindering their chances of becoming a widely adopted form of storage of value in the short to medium term.
The movement in the price of gold compared to that of Bitcoin during the imminent war between Russia and Ukraine is indicative of investors still siding with more stable and reliable commodities such as gold and oil to preserve the value of their money instead of cryptocurrencies, which are more volatile in nature.