In the last 24 hours, the crypto market saw sharp rallies across the board. The war in Ukraine has become a turning point in the world order in many ways, one of which has been in demonstrating the might and use of these assets.
This article provides a brief overview of the main reasons the market is up today. These include increased crypto spending by Ukrainians and Russian citizens’ perception of it as a safe haven.
A historic moment for crypto adoption
The past weekend was a historic moment for cryptocurrency adoption. Ukraine posted an official plea for cryptocurrency donations on Twitter. Donations poured in, topping $15 million, which doesn’t include various other initiatives that have been organized to raise funds.
The Ukrainian government is using donated crypto to buy critical supplies, including gas, food and military equipment as the country continues to battle Russian forces tirelessly. It has been estimated that they have spent around $10 million in crypto so far.
The power of borderless currencies
The rush to support Ukraine financially highlights the power of borderless assets like Bitcoin and Ethereum and reminds of the critical role DeFi and other non-custodial solutions can play. People fleeing Ukraine only need a seed phrase to transport their Bitcoin or Ethereum.
Ukraine’s move to ask for crypto donations is an important milestone in the process of adopting the asset class globally. Naturally, that has reflected in its price growth.
The role of Russia in rising crypto prices
Russians are rushing to stock up on crypto in an effort to protect their assets and to bypass state-imposed capital controls. Sanctions against Russia are driving Russian citizens to buy it as a way of surviving the conflict, which led the ruble to shed more than 30% of its value.
Data of Chainalysis shows the Russian Federation ranks 18th in crypto adoption worldwide. There is no doubt that the conflict Vladimir Putin started will fortify this in the country. It might even push it to an all-time high as Russian citizens try to cope with the economic consequences.
A final contributing factor is the unwinding of net short positions by traders, which CoinDCX attributes to a short squeeze.
Major crypto price movements
Bitcoin (BTC/USD) gained 13% today, trading for more than $43,000 at the time of writing. The second-biggest cryptocurrency, Ethereum (ETH/USD), jumped by 10% in 24 hours. Binance Coin (BNB/USD), the fourth biggest crypto and the native token of Binance, gained 11% today.