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.
Cypto and War
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 using crypto to aid humanitarian efforts before we get into how the war has affected crypto:
- As a result of the onslaught of conflict and the following surge in crypto-based donations, an increasing number of people are learning how to access and purchase bitcoin. This elevates it from a niche investment approach to one that can be sponsored by lawmakers and other influential figures.
- Economic or political variables have no bearing 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 smartphones.
- Donating in crypto also allows younger individuals to participate in areas where they previously couldn’t. When compared to physical donations, cryptocurrency is significantly easier to understand and send.
Has Crypto Profited from the Ukrainian War?
The value of cryptocurrencies has been recognized and welcomed by Ukrainian government leaders. President Volodymyr Zelenskyy has previously signed a law establishing a solid framework for cryptocurrency platforms in Ukraine. This means that after the war is finished, Ukrainians will be able to trade cryptocurrency legitimately. Furthermore, this legislation will push cryptocurrency into the mainstream, allowing it to be regulated under certain laws. This will be beneficial because cryptocurrency has frequently flowed into Ukraine for illicit or shadow activities.
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 BTC in Russia has pushed it up by at least 14 percent.
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.