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How Ukraine War increased the importance of Crypto Assets

In the wake of the Ukraine invasion by Russia on 24th February 2022, investors hastily dumped riskier assets. Crypto assets took the beating initially when the most popular crypto asset, Bitcoin intraday price, fell by almost 8% before recovering by the end of the day. The effects of the Ukraine war witnessed Bitcoin price moving up by 10% within a week ending 11th March 2022. The Russia-Ukraine war has entered the 4th week, yet there are no signs of either side backing off though high-level negotiations continue at mutually agreed locations.

There was an upswing in the prices of crypto assets owing to the war. So let’s understand how cryptocurrency demand spiked ever since the effects of the Ukraine war came into public attention.

Crypto assets as Saviour to Ukraine

The crypto asset is becoming a much-needed lifeline for a country devastated by the Russian bombing. Since the day Russia invaded Ukraine, Ukraine has received donations worth more than US$ 56 million in various cryptocurrencies such as Bitcoin, Ethereum, Solana, Polkadot, Tether, Dogecoin, and many more. The humanitarian agencies have been using these funds to distribute aid in war-affected areas and procure supplies for Ukraine soldiers to meet their requirements of food, uniforms, and bulletproof jackets. Ukraine had planned for digital transformation, using digital assets and blockchain technology, to revitalize the economy and move all government services online.

Instead of going ahead with those plans, as effects of the Ukraine war, the government started looking out for using its knowledge in crypto and digital assets to fight the war imposed upon them. Within a couple of days of war breaking out, they decided to seek crypto donations, and aid came on humanitarian grounds. They discussed all possible ways, including crypto assets donation, to help the cash-strapped army. The government even facilitated the creation of digital wallets and supporting infrastructure to get funds and send funds (crypto) to different suppliers for the army’s requirements. The Ukrainian Government has also announced plans to sell NFTs (Non-fungible tokens) as another avenue to help the military.

Impact of Sanctions on Russia

In the wake of sanctions imposed on Russia by the western countries, there is growing apprehension among the governments and regulators across the western countries that Russia would also turn to crypto to bypass sanctions, which is an isolated economy from the rest of the financial world. With the economic sanctions against Russia getting imposed, it is likely to opt for less vulnerable, decentralised alternatives like Cryptos. Western countries have asked crypto exchanges worldwide, such as Coinbase, Kraken, Binance, and others, to stop serving Russian clients and traders to prevent Russia from bypassing sanctions and using crypto asset. It is also becoming a war on Crypto for Russia to circumvent financial sanctions.

The majority of renowned companies such as Apple, Samsung, and others operating in Russia have stopped selling goods and services there. FinTech companies or Payment processing platforms, namely, PayPal, Wise, Remitly, have started blocking fund transfers to and from Russia. Despite crypto exchanges calling such requests – as unethical, disproportionate, and against the ethos of the crypto mechanism – these exchanges came out in compliance with the sanctions.

Another threat looming large is about financial criminals, drug dealers, and tax evaders – transferring funds in the shadow of crypto – which has the potential to open doors for Russia and its supporters to evade economic sanctions. Hence, financial regulators need to take care of this war on the crypto syndrome aspect immediately. Security is another threat for those owning cryptocurrency, though it’s possible to add layers to make government seizure difficult. Digital assets like crypto could be stored in a device called a cold wallet or hot wallet.

Crypto asset Price Movement during Russia-Ukraine war

Though thousands of crypto assets exist, we would restrict our analysis of the crypto price movement during the ongoing Russia-Ukraine war to the top 2 sought-after crypto assets, namely Bitcoin and Ethereum. 

Bitcoin’s closing price on 23rd February 2022, viz. a day before the Russia-Ukraine war broke out, was US$ 37,571 (Equivalent to INR 28,55,400/-), whereas Ethereum closed at US$ 2,644 (Equivalent to INR 2,00,944/-) on that day. The bottom of Bitcoin and Ethereum was US$ 37,461 (Equivalent to INR 28,47,050/-) and US$ 2,499 (Equivalent to INR 1,89,925/-) respectively during the war period. The closing price on 17th March was US$ 40,717 (Equivalent to INR 30,94,500/-) and US$ 2,772 (Equivalent to INR 2,10,670/-) for Bitcoin and Ethereum, respectively. In other words, the prices of the top 2 crypto assets remained unaffected during the ongoing war, and instead, it has gained almost 5% in these 22 days of the war.


The crypto assets turned out to be the saviour for war-affected countries and as a tool to bypass financial sanctions for the invading country. It’s essential to protect your crypto holdings from scammers and fraudsters by adding a safety net by storing them in a cold wallet or hot wallet device. The effect on crypto prices was not much, where we have seen crypto prices recording a gain of almost 5%, though not moving in tandem with equity prices.

Having understood the significance of crypto assets as a savior for the war-affected country and a means to bypass financial sanctions for invading side, you can start buying and/or selling crypto assets on one of the oldest crypto exchanges in India, Zebpay.





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