Bitcoin extends dip below US$40,000 as Ukraine tensions boost gold

[SINGAPORE] Bitcoin dropped to a more than 2-week low, tumbling along with equities as escalating tensions between Russia and Ukraine weighed on risk appetite.

The largest cryptocurrency dropped as low as US$36,831 on Tuesday (Feb 22) morning in Asia after Russian President Vladimir Putin said he's recognising 2 self-proclaimed separatist republics in eastern Ukraine.

Bitcoin dipped below US$40,000 level over the weekend and kept weakening as the Ukraine crisis deepened, undermining the argument that cryptocurrencies are a haven in times of geopolitical turmoil. At the same time, gold has reached its highest level since June.

"In the globe's latest maelstrom - US/Russia/Ukraine - Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its arch-enemy, gold," said John Roque of 22V Research in a note on Monday.

Roque predicted Bicoin may fall below US$30,000 as traders increasingly favour gold, potentially pushing bullion to an all-time high. BLOOMBERG