The Russian global financial system is in dire straits after the United States and other Western countries imposed sanctions following the country’s invasion of Ukraine.

This has blocked the country’s ability to prevent a major devaluation of the ruble on the foreign exchange markets, severely limiting the ability of its banks to make international transactions per reports.

Even with this development, it appears Bitcoin has conspicuously benefitted with a reported sharp rebound in the market. According to CNBC, it has jumped more than 12% on Tuesday, Mar. 1, continuing its rise since Russia’s invasion of Ukraine.

The cryptocurrency last rose 12.5% to $44,249.08, according to Coin Metrics. Ether jumped 10% to 2,994.29. Earlier in the day, the crypto asset rose above $3,000.

Market analysts are left wondering about this development although several factors may be tied to it. This includes investors possibly buying the dip, attempts to evade sanctions and Ukrainians and Russians trying to get their money out of their respective countries.

There is currently an ongoing debate on whether bitcoin could be used by Russia to evade the sanctions imposed. It is not owned or issued by a single authority of the central bank.

“I would say that’s the reason why bitcoin has shown strength now — because the Russians have a way of getting money out, getting their wealth out,” Mobius, founding partner of Mobius Capital Partners, said.

However, Ari Redbord, the head of legal and government affairs at TRM Labs points out that Russia may find it daunting to convert to and from bitcoin.

“You’re going to see Russia attempt to circumvent the U.S. financial system by turning to crypto. I think the issue is … the liquidity just simply isn’t there,” Redbord quipped.

It would make sense even if it would take much to convert to bitcoin. Given the sanctions that the country is facing and investors worried about it, it may take time but may be a plausible way to allude it.

Bitcoin logo
The Bitcoin logo is displayed on the screen of a Bitcoin ATM on November 10, 2021 in Los Angeles, California. The price of the cryptocurrency hit a new record high today nearly breaking through $69,000 as inflation has risen to a level not seen in 30 years. Photo by Mario Tama/Getty Images

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