Bitcoin dipped below $38,000 on Monday as global markets fell on fears that Russia's military special operation in Ukraine and the resulting rise in commodity prices could have a broader and longer-term impact than previously thought.
The major cryptocurrency plunged by 3.7% to $37,596 early Monday in Asia, its lowest level in a week, before recovering slightly. Ethereum dropped by 4.6% to $2,508.80, its lowest level since February 24. Other top tokens such as Solano, Cardano and Avalanche also fell, according to prices from CoinGecko.
Bitcoin has now given up all the gains it received at the start of last week and is again trading broadly in line with other risk assets. Monday's losses came as oil soared over fears that the US and its allies might ban Russian oil imports, putting further upward pressure on already elevated inflation.
Bitcoin has been trading sideways for most of this year, not rising above $45,000.
The decline in cryptocurrency contributed to a broad sell-off in Asian stock markets on Monday. As a result, Hong Kong's Hang Seng Index fell by 3.6% and Japan's Nikkei was down by 3%. Russian President Vladimir Putin said on Sunday that the military special operation would continue until Ukraine accepts his demands.
In the second week since Russia conducted a military special operation in Ukraine, analysts have been deciding whether cryptocurrencies are a hedge against governments' growing willingness to seize financial assets or a convenient sanctions evasion tool that needs stricter regulation.