Cryptocurrencies during the war
The relentless armed conflict in the East affects the whole world, not only on both sides, as most may seem. After the attack on Ukraine, Russia has to face a series of sanctions that affect citizens to a greater or lesser extent. The rapid decline in the value of the ruble and the restriction of the flow of goods and services affect the global economy.
In such a situation, cryptocurrencies can become a security for the capital of Russians, but also for Ukrainians who, fleeing the threat, should have access to their funds and the ability to freely use them.
Cryptocurrencies by definition would be decentralized and allow for the free flow of capital without the use of FIAT currencies in order to avoid losing their value. This process could be seen at the beginning of the Covid 19 pandemic, when cryptocurrencies began to be called digital gold. Investors not only had the chance to secure their capital, but also considerably multiply it.
Ukraine has already opened up to the cryptocurrency market and even introduced the first regulations. Thanks to this, the country is now able to fund its budget, purchase weapons and support the civilian population. In order for cryptocurrency holders to support Ukraine, a special Crypto Fund of Ukraine was established. And besides it, many other aid initiatives have appeared, such as: CryptoPunk or UkraineDAO. The hacker group Anonymous is offering Russian soldiers a reward for a tank donated to Ukraine in the amount of over USD 50,000, paid in BTC. Therefore, we observe completely new solutions related to financing or the exchange of funds for goods and services.
Likewise, Russia can benefit from cryptocurrency transactions. Due to the decentralized nature of blockchain, it is difficult to determine where the funds are coming from, and this makes it easier to circumvent the sanctions related to the exclusion of Russia from the SWIFT system. It is said that the oligarchs, thanks to the access to cryptocurrencies, are free to circumvent the imposed obstacles.
In March, an official statement from the largest cryptocurrency exchange, Binance, announced that they would not block Russians from accessing cryptocurrencies. However, the situation has changed so much that restrictions have been introduced for users from Russia: you cannot trade or create deposits, you can only withdraw funds.
Cryptocurrencies are still quite strongly related to classic currencies, so it is not surprising that in a short time the fluctuations in the currency market spilled over into the cryptocurrency market. At the moment, it is difficult to assess whether an investment in cryptocurrencies is a safe haven for funds.
Analysts working on the report for Finder.com estimate that BTC will hit $ 80,000 this year. According to them, political uncertainty, the need to have uncontrolled assets and inflation will make the popularity of cryptocurrencies only increase their value.
What is worth doing is to closely observe the situation because the upcoming events will affect all investment markets.
However, it is undisputed that the present time may be the best time to buy cryptocurrencies at a bargain price. Especially if we are focused on investing in the long term. On the wave of this popularity, cheaper altcoins, which have an increasing share and importance in the market, are also gaining.
