No matter what age or decade it has emerged in, war has always been a costly endeavor. Unless a government has outside assistance, political and military strategies tend to deplete a country’s coffers quickly. This has also been the case in Ukraine. The country is at odds with Russia in one of the world’s most serious wars. However, because this is a battle being waged in 2022, it has been a little different from previous conflicts. So, let’s dig deeper into it, focusing on how the crypto market influences and is influenced by it.
Ukraine’s War and Cryptocurrency
When most people think of war, they think of death and destruction. If people think about it from an economic standpoint, they might see physical aid being given to the country in issue, such as food, clothing, cash, and so on. The Ukrainian War, on the other hand, has been dubbed the world’s first cryptowar.
This is due to the fact that bitcoin has allowed generous benefactors from all over the world to donate to war relief operations. The breakthrough occurred in March 2022, when Ukraine’s Vice Prime Minister, Mykhailo Fedorov, revealed details for two crypto wallets on Twitter. He invited people to give to Ukrainian citizens using Bitcoin, Tether, and Ethereum.
People took advantage of the opportunity, sending millions of dollars in cryptocurrencies to Ukraine. Given that the price of BTC (Bitcoin) had dropped in the early days of the battle, this worked out well. It was less expensive to buy and send cryptocurrency, which helped Ukraine.
The Ukrainian government has also developed a website to coordinate the flow of cryptocurrency into the country since then. As a result, we can confidently state that crypto has aided the Ukrainian military effort. However, the question remains: is the battle helping or hurting cryptocurrency?
The Advantages of Donating in Cryptocurrency
- Let’s take a quick look at the advantages of adopting crypto to aid humanitarian efforts before we get into how the war has impacted crypto:
- As a result of the onslaught of conflict and the following surge in crypto-based donations, a growing number of people are now aware of how to obtain and purchase cryptocurrency. This elevates it from a niche investment approach to one that can be supported by legislators and other influential figures.
- Economic or political issues have little impact on cryptocurrency donations. Even if Ukrainians lose access to their regular bank accounts, they can still accept cryptocurrency donations by setting up a digital wallet on their mobile devices.
- Using cryptocurrency to donate also implies that younger people will be able to participate.
- Even though Ukraine is in the midst of a civil conflict, crypto-based assistance is still available. Almost every citizen can set up a crypto wallet and receive donations right away using the Internet and their personal device. Indeed, despite the current crisis, this has been one of the primary ways in which Ukrainian NGOs have managed to stay afloat.
Has Crypto Profited from the Ukrainian War?
The value of cryptocurrencies has been recognized and accepted by Ukrainian officials. President Volodymyr Zelenskyy has already signed a bill into law that will create a solid framework for crypto platforms in Ukraine. This means that after the war is done, Ukrainians will be allowed to trade crypto legitimately. Furthermore, this legislation will usher cryptocurrency into the mainstream, allowing it to be regulated under specific laws. Because crypto has frequently traveled into Ukraine for illegal or shadow activities, this will be beneficial.
The influx of cryptocurrency into the country has also benefited BTC holders. BTC was destroyed when the conflict started. Smart investors anticipated that the tides will turn and decided to invest right away.
The influx of cryptocurrency into the country has also suggested advantages for BTC holders. BTC was destroyed when the conflict started out. Smart investors opted to invest right away, anticipating a shift in the market. They’ve done it now. Donations to Ukraine during the war spurred a surge in interest in BTC over the border, boosting its value by a factor of ten.
Russians are essentially facing global and national sanctions on their currency, as well as a decline in their currency. They’ve decided to use cryptocurrency to transport money in and out of the country because of the difficult circumstances. Because cryptocurrency is unregulated, Russian residents can buy and trade it using their mobile devices while maintaining their economic independence. The demand for bitcoin in Russia has pushed the price up by at least 14% in the last month.
Overall, Bitcoin dropped as the fight intensified, but it has since regained its footing during the last month. Other currencies, such as Solana, Ripple, and Ethereum, have followed BTC’s lead and showed an increasing trend.
The Crypto Market’s Impact on the War
The flow of crypto has undoubtedly benefited from the fighting. The millions of dollars in donations donated to Ukraine have not only made the government more open to crypto regulation, but they have also shifted public opinion toward the concept of blockchain. Cryptocurrencies are likely to become more widely accepted, and they may enter the mainstream sooner rather than later. While some traditionalists may have dismissed cryptocurrencies in the past as a joke, there is no doubting that it must now be regarded seriously, particularly given its power to influence or shape political movements. BTC, as well as its owners, has reaped the biggest benefits.
To summarize, the crypto market is on its path to establishing a stable economic system.