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Three sources close to the Kremlin told Reuters that Russian President Vladimir Putin is flatly rejecting calls to negotiate peace with Ukraine, with two of those sources saying he is instead likely to escalate the conflict in the coming months. One source, described as someone who meets regularly with Putin, put it bluntly: there is a “high probability” of escalation ahead.
The catalyst, paradoxically, is Ukraine’s recent success. Kyiv’s long-range drone campaign has hammered Russian energy infrastructure, including a strike on July 6 that reportedly halted operations at the Omsk refinery, Russia’s largest. Additional strikes have hit facilities across the Tatarstan and Saratov regions, destabilizing refining capacity at no fewer than five major sites. Rather than pushing Moscow toward the negotiating table, the attacks appear to have done the opposite.
Energy infrastructure under siege
Reports indicate significant fuel shortages across multiple Russian regions, a development that simultaneously hurts Moscow’s military logistics and its civilian economy. For a war now well into its fifth year, that kind of sustained economic pressure matters.
Putin’s response to feeling cornered has historically been to double down, not retreat. The sources speaking to Reuters painted a picture of a leader whose resolve has been strengthened, not weakened, by the attacks. Diplomatic efforts from various quarters, including those by former US President Donald Trump, have gained no traction against Putin’s focus on territorial objectives, particularly full control over the Donbas region.
Crypto’s complicated relationship with geopolitical risk
Bitcoin’s behavior during geopolitical crises has been inconsistent. During acute moments of uncertainty, Bitcoin has sometimes rallied alongside gold as investors seek assets outside the traditional financial system. But there is also plenty of evidence that Bitcoin trades like a risk asset, selling off alongside equities when fear spikes.
In the early days of the invasion in 2022, Bitcoin initially dropped before recovering. Trading volumes surged as participants on both sides of the conflict used crypto for cross-border transfers, donations, and sanctions evasion.
Ukraine has raised hundreds of millions of dollars in crypto donations throughout the conflict. For investors watching the current escalation signals, spikes in volume during geopolitical stress events have historically preceded meaningful price moves in either direction. Ethereum and other major tokens tend to follow Bitcoin’s lead during macro-driven volatility, but with higher beta.
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