BITCOIN surpassed $45,000 on Friday, spurred by reports that the Kremlin may take the world’s most valuable cryptocurrency in exchange for Russian gas.
It has only soared above the important trading level three times this year and is still well below record highs.
After Moscow was slammed with unprecedented financial sanctions following its invasion of Ukraine, President Vladimir Putin declared on Wednesday that Russia would only accept rubles for gas delivery to “unfriendly countries,” which includes all EU members.
The next day, a member of the Russian parliament allegedly stated that nations that had not imposed sanctions on Russia might pay for its gas with local currencies or even bitcoin.
“The news sent bitcoin’s price (higher)… yet there are a couple of questions that hang in the air,” said Swissquote analyst Ipek Ozkardeskaya.
“China hates bitcoin; will it change its mind to buy cheap Russian oil?”
She questioned also whether the West would “tolerate Russia going around sanctions via bitcoin”.
Christine Lagarde, the head of the European Central Bank, expressed her concern this week that cryptocurrencies were already being used as a way to circumvent sanctions against Russia.
The enormous number of rubles being converted into crypto assets, according to Lagarde, is “very concerning.”
She, like other central bankers around the world, has long been a critic of uncontrolled cryptocurrencies, which are extremely volatile and can leave investors vulnerable to both losses and gains.
Marcus Sotiriou, an analyst at GlobalBlock, a UK-based digital asset dealer, said the use of the term “petro-bitcoin” instead of “petro-dollars” gave the cryptocurrency “another narrative.”
According to Bloomberg, another source of bitcoin price support could be US oil giant ExxonMobil’s use of surplus natural gas — which is often burned during extraction — to supply electricity for cryptocurrency mining.
Bitcoin mining necessitates the use of enormous machines that consume a lot of energy.
“The fact the fourth-largest oil company in the world is integrating bitcoin into its operations is also a very bullish signal” for prices, said Sotiriou.
“More importantly though, this integration allows bitcoin to be mined in a more environmentally friendly manner.”