The Effect of the Russian-Ukraine War on Cryptocurrency and Vice-Versa

[Redot_News]

It's no secret that war is expensive. Besides the monetary costs - lives lost, families devastated, and futures permanently altered. What about the war's other, less visible costs?

The last few weeks have been sobering moments for the world, and the cryptocurrency space has not been exempted. The Russian-Ukraine war took almost everyone by surprise, but the aftermath has not been that subtle. While the direct impact of the conflict may be felt more most in Ukraine, it has also sent shockwaves through the global digital currency markets.

The world was shocked when Vladimir Putin announced a special military operation in Ukraine. In the wake of the first attack, global markets responded accordingly, and the fragile American economy, which had been battling a 7% inflation rate, staggered. If there's anything we have learned, it is that conflicts have far-reaching consequences, no matter how local they may seem at first glance.

The US and the EU responded with tough economic sanctions targeted at crippling the Russian economy and isolating it from global commerce. By seizing several Russian foreign assets, looking for alternatives to Russian oil, and removing seven banks from the SWIFT network, the West made a bold statement showing that they would not allow any oppression to have a field day. On the other hand, Ukraine has enjoyed military aid from several countries and has received over $108m in donations across all government crypto accounts. What does this mean for cryptocurrency? And how has the cryptocurrency market fared since the start of the war?

In this article we will look at how the Russian-Ukraine war is affecting cryptocurrency—and how cryptocurrency may be impacting the war itself.

https://redot.com/blog/the-effect-of-the-russian-ukraine-war-on-cryptocurrency-and-vice-versa/

[fiulpro]

*enjoyed?*
Enjoying is the least bit that the ukranians are doing at the moment, loosing their house, their universities, their family members.
*Military aid?*
What military aid? Only military weapons are being transported, they are not provided with people and soilders to fight precisely why people have to take up firearms and join the territorial defence forces.

The crypto market is not a market anymore, people are using it to provide specific aids to places where it's needed, due to sanctions, the Russians are not able to use their normal banks and financial services are crippled therefore they are using bitcoins to sustain themselves the cost of rubles have seen dust overtime and therefore it's not even an option to go to banks.

Crypto market is flourishing and helping people, not to hoard money but to do everyday stuff perse.

[Flexystar]

Crypto is just crypto when it comes to war and loosing the battle for your loved ones. There is no vows for the war and its relationship with the crypto currency as far as worst humans like Hitler, Putin are considered. They are like taking the whole thing personally and taking away dreams, homes, education and hospitality away from the people.

Crypto donations are coming all across the world and I agree that we should be happy about it. But donations are donations whether they are coming in the form of fiat, gold or hospitality aids.

I would have been more happy if the Crypto currency would have part of Nobel prize winner scientist or may be an astronauts payoff for exploring something unknown in the universe or may be a kid's pocket money for doing his/her best in the school.

[Hydrogen]

If we're looking at the example of myanmar's recent coup in 2021. Financial and banking services can be shut down. Ground based internet as well.

https://en.wikipedia.org/wiki/2021_Myanmar_coup_d%27%C3%A9tat

Ukraine differed from this precedent in ways. Finance and banking were not as critically impacted as myanmar. Ground based internet appeared to have had rolling blackouts, rather than permanent ones. Traditional finance and banking services being shut down during war, leaves people with no viable alternative aside from cryptocurrencies. Ground based internet, leaves no alternatives aside from satellite based satellite options such as Elon Musk's starlink.

These conflicts incentivize mass adoption for crypto and satellite based internet. As they are the main options which remain available in regions of crisis. I think Elon Musk's starlink service has a 1 time startup cost of $500 and costs $99 a month afterward. It is an affordable option, to retain internet connectivity inside a warzone.

[bakasabo]

We will see effect of this war in few years, when people and companies that are under sanctions or use sanctions, will run out of money and supplies. Those who stay neutral or have resources will win. For example Saudi Arabia - they keep neutral, dont interfere, but due to war, their  oil now cost two times more and demand on has increased. Chinas economy will have a huge growth next few years. However cryptocurrency is an independent world. It will be barely effected with this war, but demand on it will only get stronger.

[tbterryboy]

If we're looking at the example of myanmar's recent coup in 2021. Financial and banking services can be shut down. Ground based internet as well.

https://en.wikipedia.org/wiki/2021_Myanmar_coup_d%27%C3%A9tat

Ukraine differed from this precedent in ways. Finance and banking were not as critically impacted as myanmar. Ground based internet appeared to have had rolling blackouts, rather than permanent ones. Traditional finance and banking services being shut down during war, leaves people with no viable alternative aside from cryptocurrencies. Ground based internet, leaves no alternatives aside from satellite based satellite options such as Elon Musk's starlink.

These conflicts incentivize mass adoption for crypto and satellite based internet. As they are the main options which remain available in regions of crisis. I think Elon Musk's starlink service has a 1 time startup cost of $500 and costs $99 a month afterward. It is an affordable option, to retain internet connectivity inside a warzone.

As far as I remember, Starlink was sent to Ukraine and setup was fairly easy and he kept sending one more time but did not check if he sent a third or afterwards. Which means that even though land based internet may have some trouble right now (couldn't imagine otherwise) they should be doing fine right now with starlink and internet.

Considering the insane pace (literally faster than mine) pace of starlink, this may sound weird but they have one of the best internets in the world right now thanks to this. Doesn't mean that they do not have any problems, of course they do, hell most people do not know if they are safe at their homes, internet is not something priority when you are running away to other nations. But at the very least, they have one less thing to worry about.

[jrrsparkles]

It affected the entire world if I am not wrong, this war created demand for oil and gas so price increased followed by every product that people need for their day to day life, some countries are extremely affected and gas stations were completely dried. As of now digital assets are actually gaining the value look at BTC it is soaring near $44K and gold, etc.

[bustabitsboy]

How can cryptocurrencies affect the war? No way! War can affect the value of a currency. The price of a currency may fluctuate. Anything that goes up can go down. War does not bring anything good. All markets will suffer. All that we now see bad in the world is the consequences of the war. Perhaps in the near future the situation will stabilize and it will be possible to make forecasts for the cryptocurrency rate.

[Husires]

Cryptocurrencies will not affect political decisions regarding the war in Ukraine and if they have an impact it will be limited to individuals.

• The impact of the war on cryptocurrencies will be volatile in the short term and good in the long term.
• It is too early to search for causes, details and effects, but the way the war ended will make everything clear.
• Cryptocurrencies have many factors that will affect them, and the impact of this war may be part of these effects.
• We're still in a bull market and bitcoin hasn't broken the perfect $100,000 barrier, so the volatility could be pretty wild.

We must watch what is happening now because it may indicate what could happen in the future if a third world war occurs.

[Hydrogen]

The Russian-Ukraine war took almost everyone by surprise

I don't understand why people say its surprising. There was conflict in crimea only 8 years ago and it has always been clear hostilities could resume at any moment.

The US and the EU responded with tough economic sanctions targeted at crippling the Russian economy and isolating it from global commerce. By seizing several Russian foreign assets, looking for alternatives to Russian oil, and removing seven banks from the SWIFT network, the West made a bold statement showing that they would not allow any oppression to have a field day.

I remember reading news stories about russia seeking alternatives to SWIFT years ago. I've always thought russia had hardened its economy in preparation for this type of economic warfare for some time now.

Mcdonald's and other private sector corporations completely shutting down operations in russia may have taken Putin by surprise. Canceling russian athletes, celebrities and businesses as well from outside russia. I believe all of these took Putin by surprise, causing the invasion of ukraine to stall.

If however Putin becomes convinced his economic troubles are solved, he will return to invading ukraine once again. An operation which russia appears to be conducting on a shoestring budget without the use of expensive air support, waged primarily by conscription troops on reduced wages.

[hatshepsut93]

These conflicts incentivize mass adoption for crypto and satellite based internet. As they are the main options which remain available in regions of crisis. I think Elon Musk's starlink service has a 1 time startup cost of $500 and costs $99 a month afterward. It is an affordable option, to retain internet connectivity inside a warzone.

Crypto adoption - not really, cash is king. No one is going to suddenly switch to a completely different and unstable currency when the current currency is still working well.

Satellite Internet - when Russian occupants enter a village or town, one of the first things they do is destroying or jamming local mobile networks. Similar things can be done to musk's starlink dishes. They also can't survive the shelling that often target residential areas.

Every single time there's a crisis in the world, someone will say "this is good for Bitcoin", and yet practice shows that the use of Bitcoin in such situations is just some lone cases rather than a trend.

[Hydrogen]

Crypto adoption - not really, cash is king. No one is going to suddenly switch to a completely different and unstable currency when the current currency is still working well.

I don't know anyone who carries large amounts of cash on them. Banks are often closed during wars and times of crisis, which can make it difficult to withdraw cash. Looting, violence and crime also rise during war and times of crisis. Cash carried in a wallet or pocket can be taken. Or confiscated by soldiers and security forces.

Crypto by contrast cannot be taken as easily. It provides an additional feature of making it easier to receive money and donations. Kraken exchange was offered $1,000 in funds to every person in ukraine who had made an account before the crisis began. There are other crypto projects aimed at donating funds to refugees in ukraine via BTC and other tokens.

But what really opened the door to crypto adoption in ukraine were services like paypal and electronic banking being shut down intermittently. Crypto was demonstrated to have the better realiability and uptime in contrast to trusted brand name services.

Satellite Internet - when Russian occupants enter a village or town, one of the first things they do is destroying or jamming local mobile networks. Similar things can be done to musk's starlink dishes. They also can't survive the shelling that often target residential areas.

Every single time there's a crisis in the world, someone will say "this is good for Bitcoin", and yet practice shows that the use of Bitcoin in such situations is just some lone cases rather than a trend.

Mobile networks can be used to fly drones, which can be used to attack the russian military. In that context, they can be a target.

Another thing that happens when countries like russia invade is them conducting electronic warfare against the national internet backbone to jam communications. In which case, satellite internet is the only remaining option.

Satellite networks don't need to transmit 24/7. They can be used when needed and shut down when they're not. If they're being used to buy a cup of coffee and for relatively innocent and non military purposes, russia won't care.

Its satellite communications used by the ukraine military to organize and to conduct drone attacks, that russia is concerned with.

Its not a question of whether its good or bad for crypto, it has more to do with demonstrating real world value that crypto can have to ordinary people in times of crisis. Bitcoin can literally save your life. Surely this must be worth something to someone.

[hatshepsut93]

I don't know anyone who carries large amounts of cash on them. Banks are often closed during wars and times of crisis, which can make it difficult to withdraw cash. Looting, violence and crime also rise during war and times of crisis. Cash carried in a wallet or pocket can be taken. Or confiscated by soldiers and security forces.

If you are staying within Ukraine, you need cash to be comfortable, especially in the more rural areas where no one accepts payment cards and the closest supermarket is 5-10 km away. Crypto can be useful as a store of value, but it's not as good as a bank account in most situations. If you're about to get robbed and the thief realizes that you have crypto, they will just take it all with a $5 wrench attack. It's much less likely to work with a bank, because if a bank sees suspicious transaction, they will launch multi-step verification to check that you aren't being phished or coerced to make it.

Crypto is practically useless as a payment method in Ukraine. You can't buy gas or food or medicine with it. Maybe before the war you could find a few specialized shops in large cities that accepted crypto, but it's irrelevant now.

But what really opened the door to crypto adoption in ukraine were services like paypal and electronic banking being shut down intermittently.

Did you even know that PayPal actually STARTED working in Ukraine during the war? They are even offering zero-fee transactions. And all Ukrainian banks are fully operational. And they are all connected to international payment systems. It has been 4 weeks since this war started, and you're talking about "imminent" shut down of these services, lol.

[justdimin]

The infrastructure costs are one of the most important one as well that people keep forgetting about. We have millions of Ukrainians leaving their lands, and then when the war is over, and everyone comes back, we are going to see a whole nation that is destroyed.

So, there will be need to build schools, hospitals, houses, and many other things that I can't list right now. Building these will not take a single day, it will take years to build it back how it was. This means that for many years, Ukraine will not progress to the future, they will only "improve" to how they were once upon a time before this war started and that is an important difference.