On 1st February, Russia’s central Bank reported that the country’s money supply was 65.3 trillion roubles, worth approximately $629 billion. Now that Bitcoin has broken through the $41,000 resistance point, its market cap has surpassed that of the Russian currency.
According to data from CoinMarketCap, Bitcoin’s market cap surged to $780 billion on Monday, 28th February, as the price increased by 5.7%. It now stands at over $43,000, an increase of around 13%.
It’s not difficult to see how this occurred. Due to the economic sanctions hitting Russia in response to its invasion of Ukraine, Russia’s Central Bank was forced to raise interest rates to 20%, sending the rouble into freefall. As the deeper sanctions, including the exclusion from SWIFT, hit Russian markets on Monday, the value of the rouble started its decline and has continued to lose its spending power by 30% due to inflation.
At the same time, United States dollar-pegged stablecoin Tether witnessed a spike of over 30% in five days against the Russian rouble, and data from crypto exchange Binance shows that the rouble is undergoing inflation as the USDT/RUB trading pair — for the first time in history — crossed 105 roubles. Prior to the spike, the USDT/RUB pair maintained a comparatively steady market price below 80 roubles.
Russian and Ukrainian residents rush to crypto exchanges
Meanwhile in Russia and Ukraine, residents seem to have driven trading activity up on exchanges, possibly over concerns about the stability of their countries’ respective fiat currency. Another factor in this is Ukraine’s call for Ukraine’s cryptocurrency donations to help the government and the people. And, on the first day of the invasion, 24th February, Cointelegraph reported that the Ukraine-based crypto exchange Kuna had around $4.4 million in total trading volume of all tokens over a 24-hour period.
Crypto and NFTs come to Ukraine’s rescue
For Ukrainian citizens fleeing the country, the financial situation is perilous. As one tweeted, “My Ukrainian cards don’t work anymore, although I am safe in Kazakhstan. Crypto is the only money I still have, and today I can say without exaggeration that BTC, ETH and NFT are going to save my life while I can’t come back home.”
Prominent crypto entrepreneurs have also been active. FTX CEO Sam Bankman-Fried was one of the first to offer monetary support to FTX traders from Ukraine by giving all of them FTX $25 each.
As he said, “Do what you gotta do.”
Other support for Ukraine has come from feminist band Pussy Riot. Its new UkraineDAO immediately attracted thousands of followers on Twitter. It is collaborating with PleasrDAO, the DeFi collective, and Trippy Labs, an NFT studio. The UkraineDAO is an NFT drop of the Ukrainian flag, with tokens issued and all proceeds raised donated to organizations supporting the people of Ukraine. The minting price will be set at 0.08241991 as a tribute to Ukraine’s Declaration of Independence on Aug. 24, 1991.
With Bitcoin surging it would seem that an appetite for risk has returned to the crypto markets after a bumpy February, although it is difficult to say whether this is a short-term move or if it could herald a return the all time highs seen last year. Aside from that, it is also interesting to watch crypto’s role in this conflict and observe how that plays out.