[eifec]

And funny how crypto markets have not realized this at all yet e.g. https://www.binance.com/en/trade/BTC_RUB - i would have thought with 24/7 trading (unlike futures which take a break for the weekend), they'd be leading indicators

[323]

The liquidity in this market is tiny: volume of $10 million in the last 24 hour.

[cliftonk]

Any diff in that price vs spot presents an arbitrage opportunity, so price should still be close to accurate.

[323]

This is a unique situation. Spot is closed, you are looking at CME futures, which would not usually move since the underlying spot market is closed. So few people capable of doing this arbitrage would bother.

[kasey_junk]

There is no such thing as a fx spot market. All fx is done directly with the counterparty.

That said most of those counter parties are closed because they trade in Europe & the US.

[darksaints]

Nah, liquidity is too low. Spreads will kill almost all arbitrage opportunities.

[newsclues]

Is that abnormally low? Lack of monetization of cybercrime as hackers work for the state?

[mbreese]

Yeah, you should look at that chart again with less than a 1day view. The inflection is pretty easy to spot, and it’s only getting started. Yes, small sample size and small volume, but there was a clear shift over the past few days.

For all of the post-fiat arguments for crypto, this will have an effect in crypto markets as well. I wouldn’t be surprised if this causes a new round of regulation as well.

[XorNot]

It's simpler then that: you currently can't trade things in and out of Russia, and can't turn rubles into other currencies: who outside of Russia wants to trade Bitcoin for Rubles?

[mrpopo]

Any wealthy person who has assets in Russia and outside of Russia could take advantage of this situation.

[XorNot]

How? Again: who internationally would want to give up Bitcoins for Rubles, when you could instead use them on literally anything else in the world. There's no expectation that Russian currency will go up in value in the near future, and definitely no expectation or even legal means to trade physical property.

[jacquesm]

I can think of several ways to do that, but they would require a very large sink or source depending on which way things go and you may very well end up holding the bag if the other parties are better at assessing risks in a very volatile situation than you are.

[intunderflow]

Great chance for some Arbitrage there (buy rubles with USD, use to buy BTC there, cash straight back out to USD)

I would do it but I expect I'd be beaten to it with how long it would take to open an account at Binance

[323]

Where do you buy the rubles from, all forex brokers announced that they are suspending ruble trading for the moment.

[tempestn]

Exactly, and that's why the apparent discrepancy is there. Pretty much any time there's an apparent large arbitrage opportunity one will find that there's a barrier (or significant cost) to actually executing it, or it already would have been arbitraged away.

[jacquesm]

If you want to buy rubles with USD how do you propose to do so without kayaking your way to Russia first?

[UnpossibleJim]

USD => Chinese Yuan => Russian Ruble?

[jacquesm]

If you feel that the risks associated with evading these sanctions are worth the gain then you are a lot braver than I am, and besides that I would not want to profit of all this misery anyway.

[kasey_junk]

Chinese Yuan is an extremely unpopular currency corridor because a) there is no market for it, it’s effectively a peg and b) it’s divorced from usage in the country it’s supposedly from.

That is to say you’ll pay a gigantic premium on that trade.

[UnpossibleJim]

Ok, so you'd end up flat at best and the whole thing would be a wash dollar wise while still putting you on a bunch of watch lists. Is that what I'm getting out of this?

[kasey_junk]

I don’t know enough about that particular corridor to know what the specific outcomes would be.

That said, my impression is that flat would be tough and liquidity would be a real problem.

[intunderflow]

Find an answer to that question to collect a tidy profit ;)

[stavros]

The Bering strait isn't that wide, come on.

[smabie]

Good luck actually executing that trade

[jacquesm]

I don't think executing the trade will be all that hard, the settlement could be though.

[paulryanrogers]

Could it be offset by increased demand?

[gruez]

Increased demand for crypto? If anything that would make BTC prices (denominated in RUB) shoot up.

[credit_guy]

Maybe the crypto markets have already figured out that in order for sanctions to work, crypto needs to be banned, and the Fed is most likely already working on figuring out the parameters of the ban.

[Scandiravian]

I think there'll be a massive increase in energy prices due to the sanctions against Russia, which will make proof of work crypto unfeasible, so I don't think crypto will have a large enough marketcap to be a viable way for Russia to circumvent the economical sanctions

[cesarb]

> I think there'll be a massive increase in energy prices [...] which will make proof of work crypto unfeasible

Proof-of-work cryptocurrencies automatically adjust to use as much energy as possible (the amount of energy which can be bought with the block reward and fees acts as a cap, and the incentives are to increase the amount of energy used until reaching that point). If energy prices increase, they will adjust by using less energy. This has no effect on the block sizes or block intervals, so the feasibility or lack of it of any mainstream cryptocurrency will be unaffected.

[thebeastie]

Well, block intervals will be affected until the difficulty parameter adjusts. But not the end of the world.

[JumpCrisscross]

> in order for sanctions to work, crypto needs to be banned

Not necessarily. Just use the secondary sanctions mechanism, same ones that make selling Russian gold problematic. Crypto, unlike gold, also permits one to publicly flag tainted wallets.

[credit_guy]

> Crypto, unlike gold, also permits one to publicly flag tainted wallets.

That's why I said I believe the Fed is working out the parameters of the ban. I don't think it will be an outright total ban, but some type of selective interdiction.

[JumpCrisscross]

> why I said I believe the Fed is working out the parameters of the ban

Sanctions aren’t the Fed’s business.

If this were being worked on, and there is zero evidence it is, for all we get enamoured by crypto it’s too insignificant to merit serious attention at this level, it would be at Treasury and Commerce.

[arcticbull]

Currently it only helps the Russians. The Ukrainians aren't banned from banking, and can receive contributions and move money. The Russians on the other hand can leverage crypto to evade sanctions, work around SWIFT bans and support the war effort. Once folks catch on, restrictions should follow, in a perfect world. This world is far from perfect, though, so time will tell.

[jacquesm]

Crypto marketcap would have to go up massively to make that work with the little bit of crypto that is in active circulation. It will be a drop on a hot plate.

[ipaddr]

They can work around swift by making deals with other banks directly.

[arcticbull]

And yet those banks want to retain SWIFT access. My understanding is that even mainland Chinese banks didn't want to hold accounts for sanctioned entities in Hong Kong in 2020.

You really don't want to get cut out of the international banking system. It's not a good time. You lose your correspondent banking relationships and you get rekt.

In fact this happened humorously enough with Bitfinex/Tether and Noble Bank. After they talked Noble into banking them, they lost their correspondent banking relationship in the US and were forced into insolvency. [1]

[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

[geoffmunn]

People seem to think that it’s easy to create a SWIFT alternative (one that gains acceptance) and that Putin is logging into Coinbase to buy bitcoin. Neither is going to happen.

[arcticbull]

I'm not sure why it wouldn't. You can easily launder crypto, disguise its origin and have a designated third party close the positions out at a banked exchange.

That's literally the value proposition of crypto. That you can conduct international transactions without permission.

So either...

(1) The raison d'etre hasn't been met, and therefore, it's not really providing any value over a permissioned system. Or...

(2) It works exactly as designed, allowing permissionless payments across borders and so oligarchs and demagogues can transact internationally in violation of international sanctions.

I don't see a good outcome. Am I missing something?

[geoffmunn]

If a crypto coin transaction has passed through a wallet which is known to be held by a scammer (or Russian govt), you can blacklist that coin. Tumblers help, but takes away credibility.

[arcticbull]

So run it through a DEX or take a haircut. This is the Russian government or oligarchs we're talking about not Razzlekhan.

[glerk]

> crypto needs to be banned

Genuine question: why would I fight to defend the “feee world” if at the end of the day, no matter the people in charge, I have no freedom?

[ceejayoz]

Does a ban on dumping motor oil in the river mean you "have no freedom"?

Is it possible that a "free world" may still have some restrictions on actions that have impact beyond the individual making them?

[glerk]

How is owning and trading cryptocurrency akin to dumping oil into a river? That’s a weird analogy. Obviously, the river is a public good that I share with others, it is not mine to pollute.

Banning cryptocurrency is not just “some restriction”. It is an authoritarian violation of my property rights.

[ceejayoz]

> How is owning and trading cryptocurrency akin to dumping oil into a river?

The environmental impacts of cryptocurrencies have been discussed at length here on HN and elsewhere.

> Obviously, the river is a public good that I share with others, it is not mine to pollute.

Similarly, reining in war crimes is a public good, and sanctions are not yours to violate.

[glerk]

> The environmental impacts of cryptocurrencies have been discussed at length here on HN and elsewhere.

The environmental impacts of cryptocurrency are not worse than any other economic activity, because any human activity requires energy. You are picking and choosing which activities are "bad for the environment" for purely political reasons.

> reining in war crimes is a public good, and sanctions are not yours to violate

Every war is a crime. These "sanctions" are also a crime and they are ruining the lives of innocent civilians who have nothing to do with the decisions of their government.

You are willing to give up your own freedom and comfort for the war effort and trying to enlist everyone else into your war.

[brandon272]

Cryptocurrency ban != having no freedom

[neoromantique]

It does however contribute to that, tbh.

Especially with current govt. track record.

[landemva]

Crypto math is free speech. Pres. Clinton lost that battle in '90s.

[rossjudson]

"Freedom" doesn't exist. Freedom to "do something" does.

[stjohnswarts]

If you had no freedom you wouldn't be able to comment on the internet. Freedom of expression is a freedom.

[glerk]

Sure, so we have it better the North Korea, for now. I should just count my blessings and allow authoritarianism to creep in?

[jaimex2]

Good luck with that.

[kumarvvr]

I really don't understand how numbers in computer systems are affected by real world events.

At-least stocks have assets and cash flows linked to them.

What does crypto have?

Crypto is pure pricing.

[fastball]

Well if you have someone that thinks their money in RUB might go way down they might want to exit into a cryptocurrency which isn't controlled by fiat.

Demand goes up, supply stays the same, price goes up.

[femiagbabiaka]

It’s all pure pricing at some level

[kumarvvr]

Yes, but with capital markets, there are real world assets anchoring the stock market.

With crypto, the whole cycle is pure pricing. Say a bank converts crypto to money, the bank has no other way to use the crypto, other than selling it back on the exchange, presumably to other retail "investors" or other banks.

With no asset actually anchoring it, a crypto is an extremely weak pricing product that moves with sentiments, emotions and feelings.