The Russian army officially entered Ukraine last night, while the global markets turned red, gold and oil broke the records of recent times. So, why did this political crisis between the two countries turn all markets from crypto to gold upside down?
The long-standing tension between Russia and Ukraine has reached its peak in recent weeks with the increase in military activity. In the days when the West and Russia made confrontational statements and it was almost certain that Russia would invade Ukraine at any moment, although Russia described these statements as a ‘provocation’, the expected event occurred last night, but which was not welcomed by anyone . †
With the order of President Putin, Russia decided to recognize the so-called republics in the Donetsk and Luhansk regions of Ukraine, and Russian forces entered the borders of Ukraine. This development also caused the global markets, which had been affected by the statements for a long time, to crash. While there were red arrows in all stock markets, including Turkey, the value of oil and gold broke all-time records.
Latest situation in the markets:
BIST 100 was lowered below 2000 points:
The BIST 100 index, which measures the performance of the top 100 stocks traded in Borsa Istanbul in terms of market and trading volume, experienced a sudden crash with the news last night. The score, which was circulating at 2,035 levels the day before the news, was withdrawn to 1,982 this morning.
The situation was the same on NASDAQ, the world’s largest technology exchange:
The NASDAQ, where many technology giants such as Apple, Microsoft and Alphabet are listed, also fell with the news that Russia entered Ukraine. Shares of Apple, Google, Tesla, Amazon, NVIDIA, Microsoft and many more lost an average of 2% in value.
European markets hit their lowest level in the last 7 months:
European markets were also affected by the news of the war. The stock index of European stocks, STOXX 600, saw a 1.7% decline, while the decline experienced since the beginning of 2022 approached 10%. The German DAX fell 2.2% and the FTSE 100 fell 1.2%.
The cryptocurrency market is also in a deep decline:
Bitcoin, the leader of the crypto money market, which instantly lost value and gained value with the statements from the West – Russia fronts, accelerated the decline that it continued until the news of the war. Bitcoin fell to the level of $36,350. The cryptocurrency, which started 2022 with a decline, had seen the lowest level of $32,917 this year.
Oil and gold recently broke records:
Gold, which was constantly on the rise during the war statements, rose to $1,913 in global markets with the news that Russia entered Ukraine, and saw its highest level since June. Again, the value of oil, fed by the war, reached its highest level in the last 7 years. Brent oil climbed above $96.
Let’s get to the main topic: Why are crypto, commodity or other exchanges upset due to the Russia-Ukraine crisis?
Although economists can make long explanations on this subject, it is actually possible to explain the reasons without talking at length. Many investors, especially those referred to as ‘whale’, spend their wealth in relatively risky like crypto or company stocks in order to protect their money in case of uncertainty in the environment in times of war or other crisis. prefers to withdraw from investments and transfer it to safer investment instruments such as gold and oil. As a result, while the downward trend prevails in the stock markets where the money exits; There is an increase in the stock markets that investors attack.