For better or worse, cryptocurrency has now become a main part of the global financial system. It has been a part of the international conflict between Ukraine and Russia, for better or worse.
Ukrainians are turning towards crypto as any other financial institution, which is reducing the number of visits to bank accounts and other foreign currencies.
When the government is unorganized, it becomes difficult for people to rely on banks anymore, so they have appealed to another route where the government is not involved.
Cryptocurrencies are easier to transfer between countries than other assets. It is not just a digital currency but also helps in the digital transfer of monetary value.
Globally, there is a wide range of people who are supporting and donating dollars to the Ukrainian army and activist groups. There is $100 million worth of crypto that has been deposited in cryptos, which was announced by Ukraine’s deputy minister of Digital Transformation on March 9th.
Ukraine’s government had brought many crypto companies to help, like FTX, Kuna, and Everstake. The government has spent $15 million of the crypto it received.
RUSSIA-UKRAINE Conflicts will Impact the Stock Market for Cryptocurrencies
During difficult times, people want to sell their assets and encash the money for survival. Compared to other assets, these digital currencies are easy to transfer their worth even in difficult times, and this is the perfect time to showcase to the world that digital and cryptocurrencies are better than all other assets.
People used to find it difficult to transfer assets from one country to another, but with crypto and bitcoin, it is possible to transfer assets even in the worst scenario, so this has become an opportunity for the digital currencies to lead the mainstream and attract many investors.
Though bitcoin and cryptos like encash can easily be impacted by the performances of the other assets, we had a misconception at the beginning that bitcoin and other currencies.
Would be hedged against the performances of the other assets because it is the first time that digital currencies have been involved in the war.
Are individual investors diversified towards Bitcoin?
In today’s market, the price of bitcoin is highly correlated with that of the US stock markets.
From this, we can say that bitcoin has become mainstream, which is not good because it is a result of globalization.
Bitcoin’s price will inevitably fluctuate in response to the performance of other financial instruments.
As more countries accept bitcoin, the price will fall in the coming days for US investors. The correlation will become weaker and weaker in the long run.
The cryptos work on a concept called decentralization. Now, bitcoin’s prices are heavily impacted by the US stocks because they have the same group of investors, but if more people buy bitcoin, the prices of bitcoin will also be less impacted.
How helpful the avenue of crypto is for the people in crisis and the organizations in need of donations. To get the benefit from these crypto or digital currencies, you need to have good knowledge of how to handle them.
The one set of war may not be the right move to take step towards investing in cryptocurrencies.
Read More: Ukraine launches cryptocurrency donation website with FTX and Everstake
