Russia’s Invasion of Ukraine: Bitcoin Set to Play a Role on Both Sides
Bitcoin (BTC) and crypto are likely to play a role in both sides of the conflict after Russia launched a full-scale invasion of Ukraine.
International media outlets including the BBC, which reported from Kyiv, have stated that large lines were forming at banks in the Ukrainian capital, with citizens desperate to get their hands on money before troops reach the capital.
UKRAINE CENTRAL BANK GOVERNOR SAYS WE LIMIT CASH WITHDRAWALS FROM ACCOUNTS TO 100,000 HRYVNIA PER DAY
— *Walter Bloomberg (@DeItaone) February 24, 2022
In an address to the Russian people, president Vladimir Putin spoke of “ensuring the security of Russia itself.”
The BBC also claimed that a raft of new sanctions was on their way from the UK government, which has already blocked business from two of Russia’s state-owned banks and five individuals linked to Putin. And mutual banking restrictions are already driving crypto buying upwards.
Speaking to CoinDesk, Michael Chobanian, the founder of the Ukrainian crypto exchange Kuna, stated that there was now a “limited supply of tether (USDT)” and that limits had “pushed up the exchange rate to a sizeable premium.”
He said:
“In terms of financial panic, yes, there is panic. [Ukrainians] want to get rid of cash.”
With more sanctions almost certainly on their way in the coming hours from the United States, the New York Times suggested that Russia could turn to “crypto, ransomware and [the fortcoming] digital ruble” in a bid to dodge sanctions.
As a digital ruble is still a long way from a rollout, conventional crypto is a far more likely avenue, particularly considering the fact that much of the world’s crypto mining hashrate is located in Russia. The nation could also divert more of its energy reserves to crypto mining.
Ukraine’s foreign ministry called for Russia to be hit hard with sanctions and to be cut off from the SWIFT banking network.
Світ має діяти негайно. Вирішується майбутнє Європи та світу. П’ять першочергових дій:
— Dmytro Kuleba (@DmytroKuleba) February 24, 2022
1. Руйнівні санкції проти РФ негайно, відключення РФ від SWIFT
2. Повна ізоляція Росії в усіх форматах
3. Зброя та обладнання для України
4. Фінансова допомога
5. Гуманітарна допомога
Baltic State governments called for similar measures.
Joint statement with @eliimets and @GLandsbergis on the Russian agression against Ukraine 🇱🇻 🇪🇪 🇱🇹 pic.twitter.com/dnTopMUyoF
— Edgars Rinkēvičs (@edgarsrinkevics) February 24, 2022
Observers agreed that a SWIFT block could well be the most logical course of action for the Western allies.
A SWIFT ban is now most likely, alongside the most extreme sanctions on the table. The knock-on effects on food/energy and global markets are hard to understate… @LukeGromen
— Matthew Pines (@matthew_pines) February 24, 2022
All of this, some have suggested, will just force Putin and his allies closer to crypto adoption – which one observer claimed could ultimately hurt BTC’s cause in nations like the United States.
More alarmingly, we could be in for a real-time test at scale of just how effective monetary policy can be in a financialized economy and globalized environment with deep political divides. I’m not optimistic, but I hope I’m wrong. /4
— Noelle Acheson (@NoelleInMadrid) February 24, 2022
Others agreed that BTC would likely play a key role in the conflict – one way or another.
Extremely relevant for bitcoiners. This is a good excuse to ban Bitcoin.
— Peter Todd/mempoolfullrbf=1 (@peterktodd) February 24, 2022
Bitcoin high, but not infinite, resistance against government force. Russia has the technical capability to end civilization. As does the US.
What happens now will depend on how the politics play out. https://t.co/f9mkeXvRSQ
Indeed, Google Trends data from both Russia and Ukraine have shown small but not insignificant rises in searches for “bitcoin” in recent hours.
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Learn more: Bitcoin, the Ukraine Crisis and the Central Bankers Dilemma
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The Ethereum co-founder Vitalik Buterin wrote on Twitter:
“I’m very upset by Putin’s decision to abandon the possibility of a peaceful solution to the dispute with Ukraine and go to war instead. This is a crime against both the Ukrainian and Russian people. I want to wish everyone safety, although I know that there will be no such thing.”
However, some have warned that Russia was exploring more extreme measures yet – with the Guardian last month quoting Admiral Tony Radakin, the head of the British armed forces, as warning that Russian submarine activity was threatening underwater cables that “are crucial to communication systems around the world” – including the internet.
Radakin stated:
“Russia has grown the capability to put at threat those undersea cables and potentially exploit them.”
He claimed that sabotaging these cables would be an “act of war” on Moscow’s part.
Prior to the invasion, Redditors on the r/cryptocurrency sub wrote about a possible rush to crypto, with one poster musing:
“The market has dipped like crazy because people are less likely to make risky investments during uncertain times, but I think there is something they are missing. Are they going to keep their fiat currency (which can be frozen at any moment, and can’t be used to buy stuff from other countries because of sanctions). Or are they going to convert it to crypto, which can’t be easily controlled or sanctioned by governments?”
Some claimed that citizens on both sides of the conflict were more likely to buy USD and gold on the black market than take risks with crypto, but others claimed that crypto was “a natural refuge” if fiat “fails” – with precious metals “hard to secure and transport.”
At 08:49 UTC, BTC traded at USD 35,467, recovering from almost USD 34,500 reached earlier today. The price is still down almost 9% in a day and 20% in a week, erasing all its gains in the past month.
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Learn more:
– Here’s How the Ukraine Crisis Might Impact Bitcoin and the Crypto Market
– Bitcoin, Crypto, and Stocks Fluctuate as West Prepares Sanctions Against Russia’s Aggression
– ‘Powerful’ Resistance Money Gets Traction as Bitcoin & Crypto Donations Soar in Ukraine Amid Conflict With Russia
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Reactions:
Tomorrow, I will be meeting with the Leaders of the G7, and the United States and our Allies and partners will be imposing severe sanctions on Russia.
— President Biden (@POTUS) February 24, 2022
We will continue to provide support and assistance to Ukraine and the Ukrainian people.
https://www.twitter.com/jasonintrator/status/1496693866715561986All of these military decisions were made weeks if not months ago, and *everything* from Putin and Lavrov has been performative and designed to mobilize domestic public opinion. https://t.co/cy3kmorLxj
— Ben Hunt (@EpsilonTheory) February 24, 2022
For weeks the world’s been wondering whether Moscow’s muscle-flexing near Ukraine’s border was just coercive diplomacy. Now we have the answer. No diplomacy. It’s a full-scale Russian assault.
— Steve Rosenberg (@BBCSteveR) February 24, 2022
The momentum of everyday life is extraordinary — here in Kyiv, traffic still flowing as normal, busses operating, people on sidewalks. All with the irregular drumbeat of explosions every few minutes in the background.
— Nolan Peterson (@nolanwpeterson) February 24, 2022
image from the Ukrainian President’s office sent to CNN's @mchancecnn following the loud explosions the team heard on the ground in #Kyiv #Ukraine pic.twitter.com/IpJTDdmSCc
— Michael Holmes (@holmescnn) February 24, 2022
3 theses on the Russian-Ukrainian war:
— Kamil Galeev (@kamilkazani) February 24, 2022
1. Putin's decision to start the war on Ukraine isn't foreign policy. It's domestic one. Putin first consolidated his power through the war in 1999-2000 and it worked. So he repeated this trick every time his popularity started waning🧵 pic.twitter.com/Prlj6CmyU3
Showing images of the explosions at the airport outside Kyiv, CNN's Matthew Chance reports, "The border forces of Ukraine have come under attack … by Russian troops and by Belarusian troops…" pic.twitter.com/TsrPBerSmL
— Nicholas Fondacaro (@NickFondacaro) February 24, 2022
Please don't let this be another Poland 1939, where the West dithers for days while the attacking military makes rapid and deadly advances.
— Ser Jeff Garzik (@jgarzik) February 24, 2022
4/ Force your leaders to do it, or elect better leaders that have minimal spine to fight real evil, rather than sloganeering woke soundbites on TV.
— 𝕄𝕒𝕩 𝕊𝕜𝕪 🇺🇸 🇺🇦 🇮🇱 (@_lordmax_) February 24, 2022
In exchange for this agreement, Ukraine gave up 1,000 strategic nuclear weapons left in its soil after the breakup of the Soviet Union and joined the nuclear Non Proliferation Treaty. https://t.co/XUNX4DgHyn
— Glenn Kessler (@GlennKesslerWP) February 24, 2022
A new strain of wiper malware has been detected in Ukraine and, notably, Latvia. Western officials have warned for months about the possibility that Russian cyber aggression in Ukraine could have spillover effects in the region or globally.https://t.co/hOZHSqluWB
— Dustin Volz (@dnvolz) February 23, 2022
Be careful of images & videos about Ukraine war. Some are from previous conflicts, or from other countries, including an explosion in Tianjin, China.
— J Michael Waller (@JMichaelWaller) February 24, 2022
Videos of Russian fighter planes & bombers flying in tight formation at very low altitude are from an air show, not Ukraine war.
Senior German Green now saying "we must provide Ukraine with everything it needs for its self-defence. This is a turning point." That's a major change in the Greens' – and Germany's – approach to arms exports. https://t.co/f7J4qR2Xtq
— Guy Chazan (@GuyChazan) February 24, 2022
Ukraine reports taking down 5 Russian military airplanes and 11 helicopters over Ukrainian territory in the Luhansk district.https://t.co/PnwwZQZNAk
— Christo Grozev (@christogrozev) February 24, 2022
Interesting thread.https://t.co/klE0XE0LnG
— David Krae ~ PublicEnemy#246011111 (@DavidKrae) February 24, 2022
If you’re an American, and your not tracking on #Ukraine, now is the time to start. This is just not another foreign policy blip. This is potentially bigger & more deadly than anything we’ve seen since WW2. This could have generational consequences globally. This will impact you.
— Paul Rieckhoff🇺🇸🇺🇦 (@PaulRieckhoff) February 24, 2022
China says it will help Putin soften the economic blow from Western sanctions. https://t.co/7Nyvu1zFFy
— J Michael Waller (@JMichaelWaller) February 24, 2022
Within hours of Russia's invasion of Ukraine, China criticizes Western sanctions on Moscow, hinting it might provide Putin some financial relief. https://t.co/kaU8KSs7L8
— J Michael Waller (@JMichaelWaller) February 24, 2022
