Major investors use Bitcoin, Ethereum to bypass sanctions

Recent activity among major investors is catching attention in the cryptocurrency market. Notably, Bitcoin and Ethereum are being used by some large players, particularly in the context of geopolitical issues. Bitcoin and Ethereum are widely used globally, even in countries where their legality is unclear. They can bypass traditional banking systems, making them appealing for businesses under international sanctions. In Russia, for instance, oil companies are turning to cryptocurrencies like Bitcoin and Ethereum to facilitate trade while avoiding sanctions related to the war in Ukraine. Here’s how it works: An Indian company wants to buy Russian oil but faces sanctions when using traditional currencies. So, it pays a middleman in rupees. This middleman then converts the rupees into Bitcoin or Ethereum and sends the cryptocurrency to the Russian oil company. The Russian business then converts the crypto back into rubles. This process allows them to circumvent restrictions and conduct business. Despite recent sanctions, a Russian cryptocurrency exchange was shut down after facing penalties from the U.S. and European Union, but other exchanges may still be active. This situation could increase demand for Bitcoin and Ethereum as oil companies seek to evade sanctions. However, potential investors should be cautious. The sanctions might not last forever, and if they are lifted, there could be a sudden drop in demand for these cryptocurrencies. Additionally, the value of Bitcoin is partly based on its independence from government control, which appeals to some investors. While the situation can create short-term buying opportunities, such strategies may not be sustainable in the long run. Ethereum may see less impact from this trend, as its developers may adjust the platform to prevent its use for illicit purposes. Therefore, investors should consider the risks before jumping into Bitcoin or Ethereum based solely on these developments.