Crypto in times of crisis, a force for good or bad?

After what happened in Canada, people started heavily discussing cryptocurrencies. Individuals that have been historically against crypto for various reasons have come out and said that they were wrong. They realized the problem with traditional currencies when they saw how easy an overreaching authoritarian government or individual leading a country can take away people's access to money or even seize their funds directly. Fortunately governments don't have control over crypto wallets and can't stop people from trading directly and eliminating the middle man. The situation in Canada was in a sense the greatest advertisement for crypto. This being said, new conflict is brewing, the scale of which overshadows completely the happenings in Canada. With the war in Ukraine and national currencies tipping, people are again rallying behind crypto as a safe way of donating to relief causes. This has caused a surge in value not only for Bitcoin but for other cryptocurrencies as well. 

Hot takes on why crypto is surging

There are many people discussing the recent increase in value of crypto and one of them is the lead market strategist for northmantrader.com Sven Henrich. When other strategists believe the surge in Bitcoin to be just people buying the dip and is not necessarily related to anything else, Henrich gave four different reasons on why he thinks crypto is surging. The first reason would be fundamental: this also comes from the situation in Canada and it refers to the ever increasing acceptance of crypto as a real asset in the mind of the general public. The second reason is sentiment according the northmantrader's strategist. He noted that: "The Ukraine crisis highlights how bitcoin can act as a support mechanism to raise funds when traditional avenues are cut off. Blockchain [and] decentralized money to become more relevant." Many other people are in agreement with this looking at how donations through Bitcoin and other cryptocurrencies have increased in the past couple of days. There is also the added fact that Ukraine's vice prime minister recently added Dogecoin to the list of accepted cryptocurrencies stating that:"[Dogecoin] exceeded [the] Russian ruble in value. We start to accept donations in meme coin. Now even [memes] can support our army and save lives from Russian invaders. DOGE owners of the world, [Elon Musk, Billy Markus], let’s do it." Yes, some high place official is unironically saying memes can help war efforts and save lives. What strange times we live in. 

 Sven Henrich summarized his next two reasons by saying: "Technical: Bitcoin made a higher low versus equities in February showing a positive divergence [and] defense of a key trend. Start of correlation decoupling process? Safety Trade: Sanctioned money may seek bitcoin as a safe haven (unconfirmed). This also invites risk as it gives excuse to accelerate regulation (long term positive/short term risk)." 

 Even "hotter" takes on crypto

This of course brings us to some interesting questions about morals but also control. Some people have pointed out that maybe the surge in value of Bitcoin can also be attributed to Russians getting their money out. Others have also voiced their concern about this saying that crypto will allow Russia to avoid economic sanctions. Mobius Capital founder Mark Mobius explained the situation with a very simple reasoning saying that if he was a Russian he would buy Bitcoin or other relevant crypto right now. And while he and others keep talking about how Russia can avoid the sanctions with crypto, others explain that there are not enough liquidities to do that. But here is where things get complicated. Some argue that there is no "innocent" Russians right now, unless they are out there protesting the war. Others voice concerns over branding every Russian guilty because of what their leader who holds indefinite power does. You might not agree with this take but there is a sort of moral blackmail going on now in almost every western country were if you are not 100% invested in helping Ukraine or hating Russia you are somehow evil, a traitor or any other bad label you can think about. It surprising how two weeks ago people were skeptical of what they were seeing on mainstream media to a very high degree but when it comes to a war people just believe everything they see on the news? Have people even heard of informational warfare? Disinformation will be at an all time high especially during a war, from all sides involved. It will become increasingly difficult to tell what is real and what is fake. So returning to the question of: are all Russians guilty because of what Putin is doing?, Ukraine recently asked crypto exchanges to freeze all Russian accounts, keep in mind the "all" in this request. To this, major exchanges refused to do so. 

So on one hand we have people that want to use crypto in order to help the people of Ukraine, on the other hand others or maybe even the same people want to use it to hurt the people of Russia. Of course the intent on hurting the populace of Russia is to force Putin to stop but will it really work? Or are bad actors like U.S. Senator Elizabeth Warren going to use this opportunity to get a stranglehold on crypto? She recently stated that crypto is allowing Putin and his "cronies" to avoid economic pain. Some agreed with her whilst others criticized her take by saying: "So what you’re saying is that a stateless, permission-less, decentralized, and censorship-resistant currency is out of your control so it must be stopped?". Major crypto exchanges seem to agree that controlling crypto to the point of undermining its original purpose is not going to do anyone any good in the long run. Binance for example released a statement in regards to them being asked to freeze Russian's accounts which said: "Crypto is meant to provide greater financial freedom for people across the globe. To unilaterally decide to ban people’s access to their crypto would fly in the face of the reason why crypto exists." On the same page was Jesse Powell, the CEO of cryptocurrency exchange Kraken who wrote: "I understand the rationale for this request but, despite my deep respect for the Ukrainian people, Kraken cannot freeze the accounts of our Russian clients without a legal requirement to do so."  

While politicians, trade experts, economists and even regular people are locked in a heated discussion about crypto, weighing in the pros and cons, others would like to profit from the situation one way or another. Scammers posing as donation sites for helping Ukraine have sprung up, granting legitimacy to some people craving more crypto regulations and control over people's wallets. But is putting a stranglehold on crypto really going to help the situation? Do these people really think that Putin started this war without being prepared for economic sanctions or having back-up plans? Plus, even the deputy minister of Ukraine, Oleksandr Bornyakov, praised crypto when talking about the donations they received by saying: "It’s a very rapid way to get a payment — in times like that you can’t just wait for days to get money and then you have to distribute them,". Of course this comes in contrast with the request to freeze Russian wallets which we talked about previously so it is a very sticky situation to balance. Meanwhile the value of Bitcoin is dropping one day while going up another, probably as a response to international pressure from both sides of the argument. In the end no matter which side of the argument you find yourself there should be an understanding that you can't have your cake and it too! In the end cryptocurrencies are a great asset and to be even more clear in explaining the situation let's compare them to a gun. A gun in itself is not something bad. It will be very helpful to use either as a deterrent or to defend yourself. But in the hands of the wrong people it can do a lot of harm. Does this mean that we should just destroy all guns and not use them anymore? Should we only let some people use them? Who gets to decide who can use them or not? What if the person or persons deciding who gets the guns has not so good intentions, what happens then? This is why you should focus on stopping the person and not focus on the tools we uses since those tools are also helping you. 

This has been in a way a discussion that people have been having for ages. And for what is worth, think about the UK where guns are not prevalent like in the US and people still commit massive amount of deadly crimes by resorting to knifes. In the end a bad person who wants to kill will find a way and if you destroyed the tools that help both him and you, it is you who will suffer in the end. But this is just an opinion from a regular individual. What are your takes on this whole situation? Do you think that controlling crypto is something desirable? Do you think it will defeat its initial purpose or that it is just something inevitable if crypto wants to become completely mainstream? I guess, with both conflict and the crypto situation only time will tell what will happen. Here's hoping that the innocent people involved in all of this survive to tell the tale.