Will bitcoin stage a blockbuster comeback? Image Credit: Gulf News archive

(Bloomberg) - Bitcoin dropped to a more than two-week low, tumbling along with equities as escalating tensions between Russia and Ukraine weighed on risk appetite.

The largest cryptocurrency dropped as low as $36,831 on Tuesday morning in Asia after Russian President Vladimir Putin said he's recognizing two self-proclaimed separatist republics in eastern Ukraine.

Bitcoin dipped below $40,000 level over the weekend and kept weakening as the Ukraine crisis deepened, undermining the argument that cryptocurrencies are a haven in times of geopolitical turmoil. At the same time, gold has reached its highest level since June.

"In the globe's latest maelstrom - U.S./Russia/Ukraine - Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its arch-enemy, gold," said John Roque of 22V Research in a note on Monday.

Roque predicted Bicoin may fall below $30,000 as traders increasingly favor gold, potentially pushing bullion to an all-time high.