Ukraine is winning the crypto war against Russia

Europe is still at war. For the second year in a row, Ukraine and Russia are fighting a bloody war on the European continent. Whether you like it or not, this war also affects crypto coins and crypto companies. After one year, Ukraine clearly seems to be winning the crypto war against the Russians.

Sanctions

Last year in late February, when Russian troops crossed the border, the price of Bitcoin plummeted as investors understood that risky assets like tech stocks and crypto would have to make way for more defensive assets like gold, bonds and supermarket stocks.

In the first weeks after the invasion, when it became clear that the US and Europe would take Russia out of the SWIFT banking system, the Ukrainian government warned that both Russian and Belarusian politicians were trying to move their money into cryptocurrencies.

In the following months, as more and more countries imposed sanctions on Russia and it became more difficult for wealthy Russians to move their money out of the motherland, more and more of them turned to digital currencies as a possible solution.

Crypto was also used in Ukraine, but mostly to receive donations for the troops and the war effort from Ukrainians abroad.

Pro-Russian organizations are now also using Bitcoin and Ethereum as donations for their troops, especially after seeing how successful this was in Ukraine.

On the one year anniversary of Russia’s invasion of Ukraine, we reflect on the role cryptocurrency has played — both good and bad — in the ongoing conflict. https://t.co/hEOjQiIdP4

— Chainalysis (@chainalysis) February 24, 2023

However, Russia is still skeptical about crypto adoption, but is now catching up. Crypto still makes up a very small portion of the amount donated to pro-Russian causes and the bulk mainly comes from donations in fiat currency. Given the fact that Russia has a fairly ‘old’ and traditional population, this makes sense.

Telegram

Andrew Fierman, head of strategy at Chainalysis, told Newsweek this week that crypto will not flow directly to the Russian state, but is used to crowdfund troops directly.

They can’t buy tanks with this – it’s things like body armor and winter gloves for those on the front lines

Andrew explained.

The money is mainly collected via groups on Telegram, the social media app that is very popular in Russia.

Meanwhile, more and more young people in Europe are giving crypto donations to Ukraine. So Ukraine is clearly winning the crypto war against the Russians when it comes to donations. According to Chainalysis’s analysis, it also shows that crypto can be used to very quickly set up an aid organization, something that Democratic governments usually struggle with.