Bitcoin price today: Cryptocurrency at week's low on oil shock

Bitcoin price today briefly dropped below $38,000 on Monday, its lowest price in a week, as global markets tumbled on concerns that spiraling commodities prices unleashed by Russia’s invasion of Ukraine could have a wider and longer-lasting impact than previously thought.

The largest cryptocurrency recovered slightly to gain as much as 1.3% to $39,539 in New York trading hours. Ether, on the other hand, declined as much as 5.7% to its lowest since Feb. 24, before ticking back up to around $2,600. Other popular tokens such as Solano, Cardano and Avalanche also fell, according to pricing from CoinGecko.

Bitcoin has now given up all of the gains it notched up early last week, and is again trading broadly in line with other risk assets. Monday’s losses came as oil soared on concerns the U.S. and its allies might prohibit Russian oil imports, putting more upward pressure on already elevated inflation. 

Antoni Trenchev, co-founder and managing partner at crypto platform Nexo, says “there’s several competing narratives with Bitcoin,” referring to the digital asset’s use as an inflation hedge and as censorship-resistant. “Bitcoin is both a risk-on and a risk-off asset. It’s just that when panic occurs, there’s initial selling,” he said.

For most of this year, Bitcoin has been trading sideways, failing to sustain any advances above $45,000. Edward Moya, senior market analyst at Oanda, wrote in a note on Friday that “Bitcoin’s broadening formation could see selling pressure look to test the $37,000 area.” 

The decline in cryptocurrencies mirrored a broad selloff across Asian stock markets on Monday, which saw Hong Kong’s Hang Seng Index slump 3.6% and Japan’s Nikkei benchmark drop 3%. Russian President Vladimir Putin said on Sunday the war will continue until Ukraine accepts his demands, pummeling hopes for a quick resolution. 

With Russia’s invasion nearing the two-week mark, a debate has been raging about whether cryptocurrencies are a hedge against increasing willingness among governments to seize financial assets -- or a convenient sanctions-evasion tool that needs stricter policing. 

Lloyd Blankfein, the former chief executive officer of Goldman Sachs Group Inc., in a tweet late Sunday said crypto prices currently don’t appear to support the former argument.