Gertrude Chavez–Dreyfuss and Hannah Lang

NEW YORK, (Reuters) – Stablecoins are virtual tokens that can be pegged to U.S. dollars. This was in spite of a decline in stocks and bitcoin following Russia’s invasion of Ukraine.

Stablecoins generally saw a slight increase in value on the same day. According to coinmarketcap.com, their market capitalization rose 0.3% to $182.5 billion. However, its daily trading volume grew 75% to $108.1 million.

Both bitcoin and ether fell to their lowest levels in one month. The price of bitcoin dropped 3.1% last month to $36,121. However, the value of ether fell 4.1% and sank to $2,475, in response Russia’s invasion.

After Moscow launched a massive attack by sea, land and air on the European states in its largest ever assault since World War Two, the Russians attacked Ukrainian forces on Thursday.

Circle cofounder and chief executive officers Jeremy Allaire said that there is a “risk-off” environment which has been in place for several months and this in part has increased demand for digital dollars. He was referring to stablecoin USD coins, which are pegged at the U.S. Dollar on a 1-to-1 basis.

According to coinmarketcap data, the price was 0.1% higher at $1. The biggest stablecoin winners were Fei USD (a stablecoin used in decentralized finance), which was up 1.2% and Liquity USD which rose 1.4%.

Joe DiPasquale is chief executive officer of BitBull Capital which manages crypto funds. “Stablecoins are more volatile and have a narrower range than other crypto assets but their supply is very limited.”

He said that when there’s a surge in assets such as USDC, their value can go up by a fraction percent. This is what we have seen over the past 24 hours.

Analysts believe that the Russian invasion of bitcoin has weakened the belief in its safety. Actually, bitcoin has been acting more like an asset of risk than the largest cryptocurrency in the world. Bitcoin has seen a 22% drop in value since the Russia-Ukraine crisis began to surface at the start of this year.

Treasuries have attracted investors, as well as the U.S. dollars and gold. The asset has been often compared with bitcoin.

While the U.S. Treasury benchmark yield fell 4 basis points to 1.9425% due to rising prices, its peak since June 2020 was reached. Last time it was up 1.2% at 97.382.

It reached its highest point since September 2020, when gold surged. Gold traded at $1.922, up 0.8% since September 2020.