This is according to financial analysts David Morgan and John Perez, who spoke about the connection between the tension in Eastern Europe to the cryptocurrency market on the former's podcast, "The Morgan Report."
According to Perez, Russia's enemies are using Bitcoin and other cryptocurrencies to fund pro-Ukrainian forces in the conflict. This has led Russia to enact sweeping regulations against Bitcoin and other cryptocurrencies. It has also started seeing Bitcoin as an enemy of the state.
As the conflict in the region escalated, Bitcoin's connection to the tensions caused its value to plummet. It dipped below $40,000 over the weekend and continued to weaken as the crisis in Ukraine got worse. (Related: Russia recognizes breakaway republics of Ukraine as U.S. tries to exploit the region for global war.)
On Tuesday, February 22, the value of Bitcoin went down by 0.5 percent to rest at a value of $38,011.54. During the early morning trade, Bitcoin sank to as low as $36,370 before rallying slightly. This is the lowest level the cryptocurrency has traded in in more than two weeks.
Most other prominent cryptocurrencies also sank in value. Ether lost 1.4 percent of its value, ADA, the digital currency of the blockchain Cardano, lost 4.3 percent of its value and Ripple's XRP became one of Tuesday's biggest losers with a 6.9 percent drop in value.
Investors usually claim that Bitcoin and other cryptocurrencies are safe havens to invest in, that they will not heavily depreciate the assets of their investors. The past few weeks and the steady decline of bitcoin and other cryptocurrencies have obliterated this image.
"Bitcoin's safe haven narrative has almost completely fallen apart as the rising possibility of military conflict and the worsening U.S.-Russia relationship puts the wider financial market in risk-aversion mode," said Yuya Hasegawa, cryptocurrency market analyst for Bitbank, the Japanese Bitcoin exchange.
Hasegawa predicted that Bitcoin will trade within the $32,000 to $43,000 range. John Kicklighter, chief strategist for foreign exchange trading news and research platform, warned that if Bitcoin trades below $32,500, it will be a "point of no return" for the crypto market.
"Bitcoin's inability to hold $40,000 amid heightened Ukraine tensions means $30,000 is back in play," warned Antoni Trenchev, co-founder of cryptocurrency exchange and lending platform Nexo. "Geopolitics has, for now, replaced inflation as the primary driver of both traditional and crypto markets."
Du Jun, co-founder of the Chinese cryptocurrency exchange Huobi, predicted that the price of Bitcoin won't recover to within range of its all-time high of above $68,000, which it reached in Nov. 2021, until 2024, when the next "halving" event is slated to take place.
The Bitcoin halving is when the amount received by Bitcoin cryptocurrency miners is slashed by half, effectively squeezing the supply of new coins that enter the crypto market.
"Following this cycle, it won't be until end of 2024 to the beginning of 2025 that we can welcome the next bull market on Bitcoin," said Du.
"In the globe's latest maelstrom – U.S./Russia/Ukraine – Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its archenemy, gold," wrote John Roque of market research company 22V Research.
"This may be the week that we see that final death cross between Bitcoin decoupling and alternative assets like gold and silver. Bitcoiners … are realizing, you know, big coins are going to go down," said Perez.
Investment and asset traders are increasingly favoring gold over cryptocurrencies. This sudden spike in interest for precious metals like gold and silver has significantly boosted their value.
Gold's spot price, the price at which gold can be immediately bought at a specific time, hit a high of $1,912 per ounce on Tuesday morning. At the beginning of February, gold's price was just $1,800. Analysts believe it may surpass $2,000 per ounce for only the second time in its history.
Silver prices also have a very optimistic outlook, with financial analysts at Nasdaq optimistic that the price of silver will surge to as high as $30 per ounce. March silver futures hit a four-week high on Tuesday, with closing prices landing at a high of $24.755 an ounce.
"Gold has been a store of value for thousands of years … I cannot help but be bullish on gold as an asset allocator," said Sprot Asset Management portfolio manager Shree Kargutkar. "But as a speculator, I'm just as bullish on silver. It is more volatile than gold, but silver tends to do even better when gold does well."
Watch this episode of "The Morgan Report" as host David Morgan and guest John Perez talk about what they are calling the "Bitcoin Apocalypse."
Learn more about the crash of bitcoin and other cryptocurrencies at BitcoinCollapse.news.