- Conflict has shone a light on cryptocurrencies as an alternative
- Bitcoin has rallied during the crisis
- But regulation could dampen the appeal
Digital assets came to the fore in the early days of the Russian invasion of Ukraine. Ukraine received up to $55mn (£42mn) of donations in cryptocurrencies to fund its military over the last two weeks, including raising $6mn from issuing non-fungible tokens (NFTs) of the country’s flag. The world’s largest cryptocurrency Bitcoin rallied by 16 per cent in the week of the invasion, diverging sharply from equity markets, which were in freefall.
That pseudonymous, borderless assets are popular at a time when currencies are plunging in value and people are fleeing their homes is not surprising. Alexandre Birry at S&P Global Ratings told Investors' Chronicle that the war in Ukraine showed both the risks and benefits of crypto.