People all over the world use cryptocurrencies to send aid to Ukraine. The current total has reached $33 million, with contributions from Polkadot founder Gavin Wood; Binance, Uniswap, even a CryptoPunk NFT worth over $200,000 and many other unidentified people. Other information shows that the Ukrainian government has converted most of the donations into fiat through the Ukraine-founded kuna exchange.
Data from Chainalysis suggests this isn’t entirely surprising. As of July 2021, Ukraine has the fourth largest cryptocurrency adoption in the world. Therefore, Ukrainians are used to using cryptocurrencies at a time when the financial industry and fiat money are unstable.
Crypto Adoption Ranking | Source: chain analysis
Analytics platform Statista has created a map showing where cryptocurrencies are most commonly used around the world. Among them, Ukraine stands out as the center of crypto adoption in Europe.
Crypto Adoption Chart in the World as of July 2021 | Source: Statistics
On February 21, 2022, the highest buying volume for the pair BTC/UAH (Ukrainian hryvnia) in the last six months was recorded on Binance. Additionally, trading volume has more than doubled from last week.
BTC/UAH price chart on Binance exchange | Source: TradingView
This is not the first time Ukrainians have focused on the cryptocurrency market. In September 2021, while Ukraine celebrates 30 years of independence from the Soviet Union, the volume for the trading pair BTC/UAH has also reached the ATH level. This comes after President Volodymyr Zelenskyy met with US President Joe Biden to discuss Russia and the assassination of one of his key advisers. Unsurprisingly, relations between Russia and Ukraine are currently at their worst since the 2014 invasion of Crimea and Ukraine’s Bitcoin purchases are up by record numbers.
Ukrainians’ confidence in Bitcoin is even stronger as the current spot price of BTC/UAH is 7% higher than the BTC/USD pair. Right now, Bitcoin price on Binance is 1,376,663 UAH ($46,047) compared to spot BTC/USD price of $43,896.
Ukrainians are willing to pay a 7% premium to convert their fiat money into bitcoin. This demonstrates confidence in the blockchain space and the need for a method to protect their assets from ongoing geopolitical uncertainty. Russians have also recently been forced to trade Bitcoin at high prices. However, the $20,000 spread in Russia is much higher than the BTC/UAH rate.
As the Ukrainian government continues to accept donations from around the world in Bitcoin, Ethereum, and Polkadot, its citizens can also use blockchain technology to protect their funds even when banks and ATMs are down. Those who choose to cross borders to seek refuge in neighboring countries can transfer cryptocurrencies from their wallets without the need for outside help or exchange offices.
Twitter user Nic Carter has To mark One of the main advantages of digital assets over traditional money during the outbreak of war:
“Bitcoin has the ability to store your lifetime savings in a hardware wallet or 12-word seed phrase. Compare that to the closure of banks and ATMs during the war. Digital assets are always better.”
So, blockchain gives millions of people around the world the ability to protect their wealth from wartime volatility and oppressive regimes. Cryptocurrency adoption not only brings “profits” but also creates opportunities for the less fortunate.
The fact that Ukraine has been on the brink of full-scale war since 2014 should come as no surprise that it is at the forefront of crypto adoption in Europe. Many countries located in zones of war and instability are also increasing crypto adoption. A key difference, however, is that Ukrainians are less likely to use P2P exchanges, with retail value on the chain being the main reason for adoption.
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According to CryptoSlate