Bitcoin, Ether dive as Russia's attack on Ukraine rocks cryptocurrencies. Image Credit: Shutterstock

Cryptocurrencies extended declines as Russia's attacks on targets across Ukraine sent risk assets reeling, with Bitcoin slumping to a one-month low.

The largest token fell as much as 8.5 per cent to $34,337 after Vladimir Putin's push to demilitarize Ukraine started with a barrage of missile attacks on Thursday. Second-ranked Ether declined as much as 12% to $2,301.84. Other coins like XRP, Cardano and Solana were down as well.

Bitcoin's swings during the past weeks of escalating geopolitical tensions have undermined the argument that cryptocurrencies offer a hedge in times of trouble. That's in large part a result of its deepening integration into global financial markets, which causes it to move more like other risk assets, according to Ben Caselin, head of research and strategy at crypto exchange AAX.

The traditional safe haven gold, meanwhile, surged to the highest level since early 2021 on Thursday.

The Russia-Ukraine crisis "could drive prices significantly lower in the short-term," said Jonathan Tse, head of trading at crypto platform "However, it could be what's needed to find a bottom sooner, rather than an ongoing crypto winter for prices slowly grinding lower."

The next key level to watch for Bitcoin in the event of futher declines will be $28,000 to $29,000, said Vijay Ayyar, vice president of corporate development at Luno, a crypto platform. If that threshold gets breached, "we could be looking at much lower levels in the low $20,000s and below."