If I had written this article at the beginning of the month boy would I be singing a completely different tune. However, like most of us know the crypto space is known for its volatility and the ability to change in the blink of an eye. While last year was a huge year of firsts like El Salvador’s Bitcoin adoption and huge increases in the number of people involved/participating in crypto and blockchain technology this year I believe will look much different. Two main things will drive the market this year and that doesn't include inflation. Rather its government regulation by the United States and Russian aggression particularly in Ukraine. Now to many people these two things might not be the first your think of when you think of this year however I will discuss below these issues could quickly become intertwined. 

Initially, I saw Russian aggression as impacting the crypto market like any sort of geopolitical issue would. However, in the blink of an eye, this has changed. At first, it appeared that Russia was going to take the China-type stance and outlaw any sort of interaction with the crypto markets including crypto mining. As tensions have racketed up with the West through Russian President Putin called for the ministries in Russia to look at the strategic advantage Russia has as the number 3 Bitcoin miner in the world.

Now I want to look at why I say these two independent issues could rapidly become intertwined. The US finally sorting out its regulation mess would clear the air for crypto and I believe really allow the markets to take off. Even the Russian aggression I saw as an opportunity for the markets to begin another bull run since the country was moving in the direction of a ban. With President Putin’s pivot though this could cause US and Europe lawmakers to get heavily involved into crypto. Putin made a comment that is going to catch the ears of the West and that is Russia has a competitive advantage in crypto mining. In my mind that works out to be if Russia invades Ukraine, they could use Bitcoin and other cryptos to try and evade the intense sanctions that will hit their economy. Below I am going to list out the different scenarios that could occur and with this what will happen to the crypto markets as a whole. 

Scenario Zero: No Russian Invasion and No Update to US Regulation

While I think this might be the most preferred outcome for people in the space the fact of the matter is this year the US government will be doing some sort of regulatory framework. For this reason, I named it scenario zero because there is a zero percent chance of this happening. Hypothetically if it did though my belief would be the market would end up over the course of the year but it would be an incredibly turbulent market. The reason why is that regulation would consistently hang over the market. Instead of getting clarity and honestly having something passed before the midterms that voters could react to a storm cloud would hang over the market-leading to days of crazy swings but an overall modest rise in price by the end of the year. 

Scenario One: No Russian Invasion and Basic US Regulations

My personal belief is this would be the best not only for life on Earth but for the markets. If Russia backs down there is a huge plus for the world economy as a whole as things can continue to improve as they have with life slowly returning to a new sense of normalcy. It would allow for investment and overall GDP increases across the world which I feel will go with increases in crypto prices. Part of the Russian stand down could also mean that there is going to be an investment in the country for different industries or sanctions will be rolled back helping free up money on both sides. 

Further, with the US implementing some kind of regulation we in the crypto realm will not have to worry about the SEC randomly coming after some project. There at least would be basic rules and laws that DeFi and the crypto communities could adapt and aline with so that people felt better about the outcomes of investing in this space. Since it is so early and the technology is much further ahead of the regulation there is always a sense of when is the regulation shoe going to drop. An important thing to note is that this is also an election year for Congress so basic regulation on a bipartisan level should be able to be produced as both sides have shown the willingness to protect this emerging industry. 

If we are able to get both of these two results the idea of $100,000 BTC and $10,000 ETH to me does not seem to be as extreme as they currently are now. With basic regulation, you would be much much more able to predict how taxes will impact you over your various assets, blockchains, and companies would have protection to launch. Overall the market would gain an additional layer of acceptance and that would benefit everyone.

Scenario Two: Russian Invasion and Basic US Regulations

This is where it starts getting a little bit harder to predict what will go on. If Russia moves forward with its advances into Ukraine to destabilize the government or even try to further annex more of the country the stock markets are going to tank. So far this year the crypto markets have followed the Nasdaq for the most part in it being up or down however an event like this could really change it all. Certain stocks in the tech realm are sure to surge especially those that could help better prepare the US for cyberwar or advanced military systems. Precious metals would almost certainly hit new all-time highs and I believe that the crypto market would begin to switch back over to the digital gold digital silver idea. On top of that, you will have people wanting to escape the real world and I think the biggest Metaverse development would occur with the Russian war due to people wanting to get out of the "real" world and into somewhere else. 

This also would be helped along if the US does basic regulation. Like I wrote about earlier it would give a ton of certainty to US users and creators. Tons of money could be piled into this space due to people wanting to escape the possibility of another war. This also would mean that the US wasn't going after possible Russian mined crypto which would alleviate a ton of government scrutiny. With all of this in mind Metaverse, cryptos would be up big time along with certain privacy coins. Bitcoin and Ethereum I feel would enter a consolidation phase before rallying and entering another consolidation phase finishing the year up at the $55-60,000 range for Bitcoin and $4-5,000 Ethereum range really what we saw at the end of last year. 

Scenario Three: Russian Invasion and Significant US Regulation

Honestly, this is the worst-case scenario and the markets would be impacted big time. Not only would you have markets down because of a war that the US would at a minimum be a proxy to but you would have the government involved with everything in the space. I believe under this you would see a push into the privacy coins and that the main cryptos now would be crushed. However, the privacy coins would only be able to survive for a little while before I think they would have the government after them. Easily with this, I see the market going down another 10-20% and then staying there moving sideways the rest of the year. It would be bad and honestly, a ton of companies would be impacted by this including companies like Meta trying to build out the Metaverse and Roblox who already offers a Metaverse of sorts. 

Final Thoughts

As I said above the best in my mind would be that Russia stands down and basic US regulations are put into place. A lot of what I have written about is available through a variety of courses but a lot of it also comes from talks with friends in Congressional Offices. Many people in Congress have invested in cryptos so the government going too crazy really does not seem to even be an option without a Russian invasion hence why it was left out. We have Congressional members on both sides who own assets along with their staff and they do not want to do anything to lose money themselves. Russia currently is a bigger threat to crypto than inflation is due to the public comments made by Putin about mining in Russia. It could trigger a ton of bad stuff in the market if he pushes into Ukraine and then leverages mining to keep his country afloat and moving forward. 

Special thanks to BitYard for sponsoring this competition! If you were unaware for every post that enters the competition that tags The Giving Block they are making a donation! It is fantastic to see the crypto community come together to not only sponsor writers to write about important things but also to give back! BitYard has cemented itself as a platform that I am ecstatic about due to its giving nature and I cannot wait to see what is in store for it! To read more about The Giving Block I have previously written about them a bit ago here! It is a fantastic bridge for crypto people to help charities!

Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

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