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Donations in cryptocurrencies such as bitcoin and ethereum are pouring into Ukraine as the war with Russia enters its second week.
Since Russian troops invaded Ukraine on 24 February, more than 102,000 cryptoasset donations, totaling $54.7 million, have gone to the Ukrainian government and Come Back Alive Campaign.
Donations have also come in the form of nonfungible tokens and stablecoins like tether.
Donations are meant to support to the military, according to new data from blockchain analytics firm Elliptic. The raise includes a single donation of $5.8 million from Gavin Wood, the founder of a lesser-known cryptocurrency called polkadot.
Bitcoin has potential to be proven as an inflation hedge. So, theoretically, the bitcoin market would get a boost as Russia’s invasion of Ukraine sends crude oil to its highest price since 2008.
High oil prices might give the Federal Reserve an extra reason to worry about inflation, and that might keep pressure on the US central bank to tighten monetary policy from the current, ultra-loose conditions.
Bitcoin is having its best week so far in 2022; the cryptocurrency is up 12% since Feb. 27. The latest rally pushed bitcoin into the $40,000s after news of the invasion initially sent the price down to the $30,000s. As of press time, the bitcoin price was just under $43,000.
Donations have picked up this week, with around 72,000 of these donations coming in the past two days. Thus far, the contributions consist of $18.2 million in ether, $17.2 million in bitcoin and $9.5 million in a mix of US dollar-pegged stablecoins, including an anonymous donation of $1 million in tether, a controversial token designed to be pegged to the US dollar.
Accepting donations in crypto is new for the Ukrainian government. Up until Saturday, all donations had to travel via traditional payment channels, but on Feb. 26, the government decided to get creative.
Twitter accounts belonging to the Ukrainian government began to solicit cryptoasset donations for the first time. The move came after the country’s central bank cracked down on digital money transfers in connection with a nationwide declaration of martial law.
Cryptocurrencies such as bitcoin have become more popular since they allow users to bypass financial institutions that might block payments to Ukraine.
Cryptocurrency is particularly suited to international fundraising because it doesn’t respect national boundaries and it’s censorship-resistant, there is no central authority that can block transactions, for example in response to sanctions. Donations of non-fungible tokens, or NFTs, have also surged.
