Despite the gigantic impact on the global financial market as a whole, cryptocurrency markets have remained somewhat stable despite the ongoing invasion of Ukraine by the Russian state. 

According to David Duong, Coinbase's head of institutional research, the key performance drivers for the crypto markets became "more entangled" in February, as the escalation of geopolitical tensions created more uncertainty about the possible normalization path to be taken by the US Federal Reserve.

De-risking in the months leading up to the incident, as well as the quick escalation of the Ukraine crisis, resulted in enormous liquidations, forcing crypto markets to find a bottom sooner than predicted. According to the report, this, together with the assumption that the beginnings of such large-scale conflicts tend to be purchasing opportunities, and the conviction that the war would be relatively short-lived, have all contributed to the resilience.

Crypto markets have received a brief respite, but this was likely due to technical factors, with the report adding that "positioning has assisted crypto markets in retracing, but we believe they remain in an unstable equilibrium."

The medium-term forecast for the exchange is that the larger market will need more time to settle before it can begin to perform, which might come around the end of the second quarter.

Prior to the invasion, a faster recovery was anticipated, but investors will likely want more certainty about the date of peak inflation and the Fed's rate rise cycle before they are prepared to deploy additional capital.