Bitcoin is on demand since Russia & Ukraine war

Cryptocurrencies play a role in both sides of the conflict caused by the Russian invasion of Ukraine. Their ability to cross borders regardless of laws or regulations helps Ukrainian refugees to smuggle money out of the country but may also provide a way for Russian nobles to avoid harmful economic sanctions.
The Ukrainian government, in dire need of equipment, sent a call to bitcoin and Ethereum shortly after the attack last month. As of March 4, the Ukrainian bitcoin wallet had received more than £ 7.5 million, while its Ethereum wallet had received £ 3.2 million.

Unlike the funds raised by non-governmental organizations and charities, these were available to the Ukrainian government within minutes. Other crowdfunding efforts have not been so easy. Patreon’s online fundraising service blocked a Ukrainian fundraising account that attracted more than 14,000 sponsors promising a monthly sum of more than £ 300,000 because armed fundraisers violated Patreon’s policies – various donations are called they are things like “bullet” and “bomb”. Instead, the party that dumped the Patreon page, Return to Life, later sold the NFT (non-mold) token of the Ukrainian flag for about $ 5 million in cash.

Before the outbreak of war, Ukraine was already in a good position to raise funds in this way. Last month, its parliament officially approved the cryptocurrency, although it has stopped accepting any as a legal tender, as El Salvador has done.

However, Bitcoin is also saving lives in the war between Russia & Ukraine. Dmytro, in Lviv Ukraine, a computer programmer who works for a cryptocurrency mining company had managed to escape the Ukrainian war because of bitcoin.

He woke up on the 24th of February to hear the news of the attack and found the payment of cash machines limited by emergency laws, as well as large withdrawal lines. Transfers to international banks were also prohibited. He managed to transfer all his money found in bitcoin and crossed with his girlfriend across the border to Poland. Otherwise, he would have been drafted into the army, he said. “Bitcoin has saved my life.”
The Russian people have also been converting their currency into bitcoin as the ruble depreciated after international sanctions strangled Russia’s economy. Demand for bitcoin has been so high that it was trading there at a higher price than world prices. There are more people who want to buy than people who are trying to sell and who can or will not be able to accept Russian rubles.

There are fears that the Russian rich and Putin’s allies will use similar tactics to get their money out of the country to avoid sanctions. But George Lopez at the University of Notre Dame in Indiana says that any Russian oligarch using the Swiss bank – a long-term favorite option because of the country’s strict banking laws – and hopes to raise millions of dollars is likely to come from the radar of many vigilant Western governments.

He believes that although countries like North Korea have been able to establish sophisticated global networks to work on sanctions so that they can transfer funds and goods using bitcoin, Russia has no time to prepare. “All the banks are very suspicious of the big money transfers from anyone trying to convert euros or dollars who have never been a customer before,” he said.

Russian companies are now separated from the international banking system and will find it difficult to deal with foreigners using bitcoin payments, Lopez said, because the winning party will eventually have to convert it into its own currency, which could lead to financial scrutiny. Simply put, a huge amount of unexplained money is becoming increasingly difficult to deposit in banks under current processing.

European Central Bank President Christine Lagarde has urged the European Union to move forward with its markets in a Crypto-Assets law designed to regulate cryptocurrency trading, to help efforts to prevent Russian cash from disappearing from bitcoin. Ukraine’s deputy prime minister, Mykhailo Fedorov, also called for a cryptocurrency exchange to suspend Russian accounts. “It is important that we not only keep addresses linked to Russian and Belarusian politicians but also to the detriment of ordinary users,” he wrote on Twitter.
Although other trades such as Gopax have blocked Russian citizens’ accounts from legal sanctions, few are willing to take firm action, leaving the liberalization industry to stand alone while companies such as Apple, Nike, and Ford withdraw services and products from Russia.
The value of the ruble against the US dollar decreased by 20 percent from the beginning of the year to March 4. And although there have been reports of a rise in bitcoin since the day of the attack – an increase of 20.7 percent from March 4 since the day of the attack – it saw an equally significant fall last week.
It is difficult to say any price movement for bitcoin only in the Ukrainian invasion, but in this case, cryptocurrencies prove a more stable bet than the Russian ruble.