By Alun John

(Reuters) – Europe’s rising tensions and looming laws could provide clues to the following questions. Can Russia become a crypto-superpower?

Answer to the first question is not, at least for the moment. Fortress Gold has increased 2.3% over the week. However, Western warnings against Russian aggression have intensified and bitcoin has fallen 3%. It was even worse than the 0.9% index decline.

Chris Weston from Pepperstone, a Melbourne-based research firm said that there is no evidence bitcoin could be a “safe haven”. “The Ukraine and Russia situation is extremely difficult for price. So in that case, it’s best to just buy crude futures.”

It’s still too soon to ignore the arguments made by bitcoin supporters who claim that the cryptocurrency is, in its twenties, destined to become a digital form of gold. This should help it retain its value even if other risky assets like stocks fall.

Although bitcoin is now at $42,000, the cryptocurrency has not lost all its gains from Jan. 24, when it was lowest at $32,950.

Investors point out how peaceful trading is in a period of intense geopolitical tension. Russia had positioned more than 100,000 troops close to Ukraine. However, they rejected the Western threats of an invasion and called it “hysteria.”

‘s average 30-day volatility has fallen to 3.48%, versus its 2021 average of 4.56%, according to BuyBitcoinWorldwide’s volatility index.

Data platform Coinglass’ bitcoin Fear & Greed index, which measures market sentiment – 0 indicates extreme fear and 100 is extreme greed – stands at 46, above the nervy 11-33 range where it had been trading since late November.

Matthew Dibb is chief operating officer at Stack Funds in Singapore, a crypto-platform. He said he believes crypto will be a long-term alternative asset as well as a hedge against world events. “But, not yet.”

He added that “We are starting to see some disorrelation among bitcoin and the exchange market, which was very nice.” We are seeing traditional safe havens with Russia and Ukraine, but not in crypto.

SUPERPOWERS CRYPTO

In the meantime: Russia’s new crypto asset law could have a significant impact on global markets.

Russia’s interest in cryptocurrency has grown over the last year following the ban on bitcoin mining by China. China used to be the largest centre of the activity. Miners were scrambling for other options.

According to the data of the British’s Cambridge Centre for Alternative Finance, Russia was the third largest bitcoin mining location in the world.

United States holds the most mining power, 42.7%. This is followed closely by Kazakhstan and Russia at 18.1% and 11.2%.

Industry watchers think Russia may have overtaken Kazakhstan since then, as Kazakhstani miners are now forced to deal with the government’s internet shut downs in times of unrest.

The Russian regulations are still unclear.

Authorities said last week that they are working to establish rules to allow local companies to purchase cryptocurrency. After the January ban by the central bank on the mining and use of cryptocurrency, industry players considered this a positive step.

Russian Deputy Finance Minister Alexei Moiseev stated Monday that it was essential to ensure that crypto transactions and money flow can be tracked, as well as being able identify the users. The draft law may include this clause, which could diminish the anonymity of crypto currencies.

Reporters were also informed by Moiseev that only banks and exchanges would allow crypto to enter the Russian market if they comply with the anti-money laundering laws.