Solana (And the Crypto Market) Is at Vladimir Putin’s Mercy

In the already drama-filled year that is 2022, it’s becoming increasingly apparent that we live in Russian President Vladimir Putin’s world. Even decentralized cryptocurrencies like Solana (SOL-USD), which should in theory be independent of geopolitical rumblings are no match for his incredible influence.

Cryptocurrency and government regulation, concept. Modern economy, smartphone with bitcoin sign on the screen on the background of the flag of Russia, Solana
Source: Trismegist san /

Russia has engaged in multiple armed conflicts, adjusting the global map as it sees fit. Yet often it seems that many folks remain committed to focusing on China, not Russia, as the most important geopolitical adversary to the U.S.

I find this strange because in recent weeks, Russia brought everyone to the brink of World War III and for good measure, brought the spirit and integrity of the Olympic Games into disrepute. I’m not sure what else the Kremlin can do to get higher on the United States’ “adversary list.” All of this brings me to Solana.

If you’ve been following the cryptocurrency space, you’ll know that Solana is among the next generation of utilitarian blockchain projects. In short, the first crypto, Bitcoin (BTC-USD), demonstrated the viability of sending digital assets across a decentralized distributed network without the need of a third-party intermediary. Later, Ethereum (ETH-USD) brought decentralization to a range of applications through smart-contract technology.

But in both cases, these groundbreaking blockchain networks became too big, bulky and expensive. That’s where Solana and similar projects entered the limelight, delivering speed, scale, security — all at low transactional costs.

It was beautiful until Putin showed up.

Putin Exposes Economic Realities of Solana and Crypto

If you’ve been following geopolitical developments not just in this year but for many years, you’ll know that Vladimir Putin has big ambitions. In fact, a 2016 article from U.S. News and World Report noted that Leon Panetta, a man who served multiple high-level government positions, bluntly called out Putin’s motivation.

“Let’s not kid anybody,” remarked Panetta. “Putin’s main interest is to try to restore the old Soviet Union. I mean that’s what drives him.”

Well, restoring the Soviet Union means taking over Ukraine — or at least installing a pro-Russian puppet government in Kyiv. So, if you understand history and are willing to be honest, the Kremlin’s aggressive posture toward its neighbor isn’t surprising. But that it would take things so far was certainly unsettling, which subsequently exposed a critical vulnerability regarding Solana and similar advanced cryptos.

You can scream all you want about your speed, scale and immutability. Knock yourself with as many magic blockchain words as you want: decentralization, democratization, multi-shard operations. When it mattered most, most people didn’t give a rat’s behind the technical wizardry of Solana or any other crypto. Instead, all eyes were focused on Putin, just like I imagine he’d want it.

It’s simple, really. Putin orders troops to march toward the Ukrainian border and the entire capital markets — including cryptos — got shaky, then plummeted. Centralization or no centralization, investors panicked as the Russian leader flexed his muscles.

But should it be like this? Theoretically, a decentralized asset should be largely decentralized from the concerns of centralized rumblings. I get it if the dollar wobbled over the Ukraine crisis. Everything goes through the dollar.

But Solana? It’s an altcoin — and not even the most popular. Yet when the world shook, so did SOL.

Different Name, Same Game

Decades ago, an arsonist burned down legendary rockstar Tom Petty’s home. Understandably, he was so shaken up by the incident that he rebuilt his house — with fireproof materials. On paper, that should prevent any arsonist from damaging his home with fire again. However, I imagine it probably won’t do much if the fire started from within.

And that’s the dilemma that Solana finds itself with the conflict in Eastern Europe. On paper, its decentralized profile should protect it from the volatility associated with centralized assets that are integrated with the global economy. However, when Putin roared, plenty of folks cashed out across all investment classes and ran for cover.

Just as he did with the credibility of U.S. foreign policy, Putin also exposed the street cred of Solana and similar cryptos. They can talk a tough game about decentralization and all that jazz. But when it comes down to it, everything’s beholden to human emotions. And right now, Putin is the ultimate puppet master.

On the date of publication, Josh Enomoto held a LONG position in BTC and ETH. The opinions expressed in this article are those of the writer, subject to the 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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