What is crypto’s role in Ukraine?
A line forms at an ATM in Lviv, Ukraine over the weekend. Current daily withdrawal limits are 100,000 Ukrainian hryvnia, or roughly $3,350. [SOPA Images via Getty Images]
There’s never a dull moment on the blockchain. Here’s what you need to know this week:
Ukraine is seeing record crypto donations. Ukranians are using crypto to protect their wealth and resist Russia’s invasion.
More institutions are embracing crypto. Despite market uncertainty, the world’s largest financial players are doubling down.
The week in numbers. The number of cryptocurrencies AMC theaters now accept, and other key figures to know this week.
CRYPTO SUPPORT
Crypto donations pour into Ukraine as the country resists Russian invasion
As Ukraine continues to resist Russia’s full-scale invasion, international sanctions begin to hobble the Russian economy, Russian president Vladimir Putin has resorted to nuclear saber-rattling, and global markets have whipsawed. On Monday, oil prices reached over $100 per barrel for the first time since 2014, and the Russian Ruble lost 30% of its value against the dollar, plummeting to record lows. For Ukrainians, emergency economic measures — including cash withdrawal limits (about $3,350 per day) — have prompted the country’s government, citizens, and even newspapers to call for crypto aid. Let’s take a closer look at some ways crypto is assisting during a time of crisis.
Ukraine has raised over $30 million in cryptocurrency since tweeting an appeal for donations on Saturday. The official Twitter accounts of the government and Vice Prime Minister Mykhailo Fedorov shared wallet addresses for BTC, ETH, and the USD-pegged stablecoin Tether (which saw such significant demand on Ukraine crypto exchange Kuna that it traded above its peg, reaching $1.10) Why crypto donations? As blockchain analytics firm Elliptic explains, “Cryptoassets such as Bitcoin have emerged as an important alternative crowdfunding method. They allow quick, cross-border donations.”
Russian-Canadian Ethereum co-creator Vitalik Buterin amplified the appeal on Twitter as part of a string of tweets that included a sharp rebuke of Moscow, calling the invasion “a crime against the Ukrainian and Russian people.” In other Ethereum news, Uniswap added a tool on Tuesday that allows users to swap any crypto for ETH and send it to the Ukrainian government’s wallet in a single transaction.
A founding member of the Russian pro-democracy punk group Pussy Riot formed a DAO to raise funds for Ukrainian civilians. Pussy Riot’s Nadya Tolokonnikova, along with members of PleasrDAO and artist Trippy Labs, formed UkraineDAO, which sold 10,000 Ethereum-based Ukrainian flag NFTs and plans to donate all proceeds (over $5 million) to the Come Back Alive Foundation, which supports Ukraine’s military, and the Proliska non-governmental organization. (If you are considering donating crypto, be mindful of potential scams and always do your research first.)
The Kyiv Independent, an English-language newspaper in Ukraine is seeking crypto donations to support the country’s independent media. In addition to GoFundMe pages for the paper and several partners, the Kyiv Independent also listed BTC and ETH wallets. Meanwhile, a Berlin-based blockchain startup called Arweave is attempting to preserve historical documents about the crisis — so far its network of 1,000 nodes holds about 50 terabytes of related data.
Last November, The New York Times described Ukrainians as among the “most avid cryptocurrency users in the world,” and they rank fourth in Chainalysis’ 2021 Global Crypto Adoption Index. Why? A combination of factors — from high inflation to a widespread lack of trust in local banks. Ukraine is also a highly tech-forward nation, with an IT export business worth almost $7 billion last year. Ukraine also adopted a progressive bill last September, enabling the government to regulate crypto.
Why it matters… Ukranians are using crypto to defend themselves from Russia’s invasion, protect their wealth, and fund their escapes to neighboring nations. In one sobering tweet, a citizen explained: “My Ukrainian credit cards don’t work anymore. I’m safe physically in Kazakhstan, but all my savings are gone. Crypto is the only money I still have, and today I can say without exaggeration that $BTC, $ETH and #NFT[s] are going to save my life while I can’t come back home.”
WHALE WATCH
Institutional investors double down on crypto
Even though crypto prices have been … variable in recent months, global financial institutions have continued to invest in the future of the asset class. Last year, institutional investors traded $1.14 trillion worth of crypto via Coinbase alone — nearly ten times as much as in 2020. Let’s dig into Wall Street’s latest crypto moves.
This week, two members of America’s trillion-dollar bank club announced new crypto offerings: Boston-based State Street is working on “mega plans” to offer crypto services to wealthy clients while BNY Mellon will launch a crypto custody platform later this year.
Both the New York and London stock exchanges are exploring crypto capabilities. The NYSE recently filed a trademark for an NFT marketplace, potentially indicating plans to compete with players like OpenSea. And in a $325 million deal, the London Stock Exchange Group has agreed to buy U.S.-based cloud-tech provider TORA, as part of plans to enable crypto trading and banking.
E-commerce giants are plotting crypto moves. In a recent interview, eBay CEO Jamie Iannone noted the auction company’s plans to focus on Gen Z and millennial consumers — including last year’s launch of NFT trading and the prospect of soon enabling crypto payments. Further abroad, Japanese e-commerce giant Rakuten has also launched an NFT marketplace.
Crypto-focused exchange traded funds continue to gain traction. Valkyrie, which recently launched the “WGMI” Valkyrie Bitcoin Miners ETF, has now crossed $1 billion in assets for its suite of crypto funds. And the parent company of Grayscale Bitcoin Trust, one of the largest U.S.-based crypto funds, has launched a public campaign to lobby the SEC to allow spot Bitcoin ETFs to begin trading. (Spot BTC ETFs would hold crypto directly, as opposed to existing ETF products that hold crypto futures or shares in related industries like crypto mining.)
A growing cohort of major corporations is adding crypto to their treasuries. Flexport, a global logistics company, announced on Twitter that it holds some portion of its $1.6 billion balance sheet in BTC. Cash App parent company Block, which reported nearly $2 billion worth of BTC revenue in the last quarter of 2021, holds over $300 million in BTC. And in a bid to promote the participation of women in crypto, KPMG Canada — the Canadian arm of the global accounting giant (which announced that it holds BTC earlier this year) — purchased a World of Women Ethereum NFT worth $70,000.
Why it matters… According to a new survey conducted by Fidelity, 70% of institutional investors expected to buy or invest in digital assets “in the near future.” What’s drawing them? Lots of things — although one possibility is the potential for diversification, given that crypto may offer returns that are less correlated with traditional markets than many asset classes. This week, for example, the S&P 500 shed about 2% since last Friday’s rally while Bitcoin is up 15%.
NUMBERS TO KNOW
$3.5 billion
Total trading volume on NFT marketplace OpenSea during February, down from January’s all-time high of $5 billion — but still a historically huge number. February’s most popular NFT collection? The anime-style Azuki collection, which saw about $160 million in sales.
$50 million
Amount that South African crypto exchange VALR raised in a Series B equity funding round — the largest-ever crypto fundraise in Africa. Led by Pantera Capital, the round saw additional funding from Alameda Research and Coinbase Ventures.
6
Number of cryptocurrencies that memestock movie chain AMC will accept by mid-March. Moviegoers have been able to pay in BTC, ETH, BCH, and LTC since November, but now CEO Adam Aron says the company is adding DOGE and SHIB to the list of accepted coins.
TOKEN TRIVIA
When did Ethereum originally launch?
A
2008
B
2010
C
2015
D
2017
Find the answer below.
Trivia Answer
C
2015
