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Cardano Investors May Have to Play a Game of Russian Roulette

While cryptocurrencies by virtue of their decentralized protocols can facilitate social equity, they apparently can’t do anything about geopolitical stability. That’s a shame for altcoins like Cardano (ADA-USD), which have demonst…

While cryptocurrencies by virtue of their decentralized protocols can facilitate social equity, they apparently can’t do anything about geopolitical stability. That’s a shame for altcoins like Cardano (ADA-USD), which have demonstrated that they don’t exactly perform well during periods of intense strife.

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Of course, I’m not breaking any new ground when saying this. One of the reasons why we haven’t had a major outbreak of armed conflict – where one nation invades another – in the developed part of the world is the broader economic cost. Obviously, war entails (in addition to loss of human life) destruction of infrastructure and imposition of opportunity costs.

Further, even if one were to make the argument that a conquering nation could exploit the labor and resources of the conquered, the latter would not exactly be in a mood to aid the invader. Any brief look at U.S. military involvement in the Middle East would confirm this. Therefore, the latest tensions in eastern Europe do nothing fundamentally positive for Cardano nor any other crypto.

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To be fair, the Associated Press reported that Russia is open to a diplomatic path regarding the crisis in Ukraine. To recap a complex issue, Russia sees Ukraine joining NATO as a red line in the sand. However, the circumstances also involve sovereignty. Basically, Ukraine as a sovereign nation should be able to decide what it wants to do free from duress.

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Unfortunately, CNN reports that Russian units and missiles are advancing toward the Ukrainian border, directly contradicting the shift in tone. And before you say fake news, look, I can only report what’s being reported.

Should hostilities break out into armed conflict, I don’t think wagering heavily on Cardano is smart. War isn’t good for anyone, especially crypto-based economies.

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Cardano Faces Massive Test from Russian Belligerence

Even if you’re merely loosely following the 2022 Winter Olympics, you’ve probably heard of Russia’s Kamila Valieva, a phenomenal figure skater unfortunately caught with a banned substance in a December drug test. As sports journalist Dan Wetzel argued, she should be prevented from participating in this Olympics, in part because it’s not fair to clean figure skaters.

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However, she’s cleared to skate in a process Wetzel described as “an insult to intelligence.” Basically, he wrote, “the anti-doping association of a country that has been found guilty of widespread doping managed to delay a doping test and then argue that due to that very delay, its gold-medal favorite should be cleared of a doping charge.”

I see parallels with the present geopolitical flashpoint. Officially, Russia has no intention to invade Ukraine but will do so for fear that its neighbor will join an alliance that prevents Russia from invading sovereign nations. Personally, I can’t tell if Russian President Vladimir Putin is a bad guy or merely a frustrated evangelical with access to nuclear weapons.

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But you know what they say – absolute power corrupts absolutely. So, the way this conflict is brewing, it’s not good for Cardano or any other cryptocurrency.

And believe me – it’s not a conflict some 6,000 miles away or whatever. Instead, if Russia decides to invade, then it will attempt to make us pay since the U.S. must then commit to destroying Russia’s economy. Therefore, a cyberattack seems almost inevitable.

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Sadly, cyberattacks represent a key vulnerability for the crypto sector. If your wealth is entirely digitalized, a severe Russian cyberattack may render actualizing your wealth difficult due to infrastructural damage. In that case, you’re much better off with physical cash, even precious metals than Cardano or any other digital coin or token.

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Nervous but Hopeful

As belligerent as the Russians have been recently, I can’t help but wonder if they’re really going to pull the trigger. If they do, they must surely know that eventually, the U.S. must respond militarily. As the lone superpower and a force for good (on balance), it cannot afford an affront to its credibility.

Plus, the U.S. cannot afford to give China any ideas. So, I don’t think it’s any stretch of the imagination that this could set off World War III. In my humble opinion, World War III would not be good for Cardano.

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Still, the Russians are also brilliant trolls. So there is a path to diplomacy, which the Russians could take. Granted, they cornered themselves into a high-stakes stare down so I’m not 100% sure how this all goes down.

Let’s hope that we get to pull on an empty chamber.

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On the date of publication, Josh Enomoto held a LONG position in ADA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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