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  • Bitcoin jumped as much as 14% on Tuesday, as cryptocurrencies across the board staged a comeback.
  • Ether and altcoins like terra and avalanche rose sharply.
  • Russian buyers are fleeing the falling ruble as Western sanctions bite.

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Bitcoin rallied to a two-week high on Tuesday in spite of the turmoil on the broader markets, thanks to a surge in buying by Russians and Ukrainians who may be seeking refuge in cryptocurrencies as their own fiat currencies tank.

Bitcoin was up 13.8% over the past 24 hours at $43,618, according to CoinMarketCap, while ethereum's native token ether was up 10.7% at $2,915.

The two largest cryptocurrencies by market value were trading at their highest levels since mid-February, while altcoins rebounded broadly after crashing during the onset of the Russia-Ukraine crisis, particularly, smart-contract capable networks like terra, cardano and avalanche.

Terra's token luna was last up 26% on the day at around $93.40, while cardano gained 9% and avalanche rose by around 16% over the last 24 hours. 

Russia has been effectively frozen out of the international financial system following its attack on Ukraine, which has seen the ruble hit record lows and the country's most prominent companies collapse in value. 

According to a report by Kaiko, trading volumes in bitcoin denominated in Russian roubles have reached their highest since last May,  while FXEmpire said Ukrainian crypto exchange Kuna saw daily trading volume more than treble. 

DailyFX noted that Russian oligarchs and those that fear the impact of financial sanctions may be fleeing to Bitcoin, given its perceived insulation from the traditional financial system. 

"The cascade of sanctions being piled onto Russia from the United States and its allies, including the removal of major Russian banks from the SWIFT messaging system, has effectively marooned the Russian banking system from the global financial markets, casting doubt on Russia's financial ability to weather the economic penalties," strategist Thomas Westwater said.

Bea O'Carroll, managing director at Radkl, said the conflict in Ukraine and sanctions imposed upon Russia has seen bitcoin being used to transfer value, including through millions of dollars of donations in cryptocurrency.

"Maybe this is how Russia gets its value moved around. Equally, on the other side, there was 'this is how people are going to get value to the Ukrainians'," she said. 

The attractiveness of bitcoin as a means of transferring value into Ukraine was clear to see over the weekend as bitcoin donations surged and the country's official Twitter account appealed for support through bitcoin, ethereum and tether. 

Elsewhere, cryptocurrency exchange Binance committed to putting $10 million dollars minimum into a relief fund for Ukraine and Ukraine's army received $3 million from just one donation. 

"The increase in publicity for crypto as an alternative settlement method has been positive overall. This is because millions of dollars have been donated to Ukraine through crypto. Over $19 million in crypto donations has been sent to Bitcoin and ERC-20 (ether) addresses of the country," GlobalBlock's Marcus Sotiriou said. 

He called this "a historical moment" for the crypto industry as its the first time a government has raised money via crypto at scale.