Both the Russia-Ukraine war and the implementation of tariffs generally cause short-term negative impacts and increased volatility in the cryptocurrency market, though in the long-term, they can sometimes drive crypto adoption as a potential hedge against fiat currency devaluation and economic instability.

Impact of the Russia-Ukraine War

The Russia-Ukraine war has had a complex, largely negative, but also transformative effect on the cryptocurrency market:

Increased Volatility and Negative Returns: The initial invasion in February 2022 led to significant market volatility and a sharp decline in the prices of major cryptocurrencies like Bitcoin and Ethereum, as investors moved away from riskier assets.Safe Haven Ambiguity: While some investors hoped crypto would act as a "safe haven" like gold, during the initial crisis, it largely correlated with traditional stock markets and did not immediately show safe-haven characteristics.

Humanitarian Aid and Sanction Evasion: The conflict highlighted practical use cases for crypto, such as facilitating quick cross-border humanitarian aid to Ukraine and, conversely, being used by some Russians to circumvent economic sanctions, leading to increased trading volumes in both countries.Long-Term Resilience/Positive Returns: Some later studies, using data up to September 2023, suggest a significant positive relationship between the war index and cryptocurrency returns, indicating the asset class's potential for diversification and resilience during prolonged geopolitical turmoil.Impact of Tariffs, as a form of macroeconomic policy, indirectly affect the crypto market primarily through increased market uncertainty and their impact on operational costs:

Short-Term Volatility and Price Drops: Announcements of new tariffs, such as those in early 2025, have triggered significant downturns in the crypto market, as investors typically become risk-averse and sell off speculative assets like cryptocurrencies amidst global trade tensions.Inflation and Interest Rates: Tariffs can lead to higher prices for imported goods, payments.