Putin's war supports cryptocurrencies. Ukrainians are buying them en masse

At the time of the Russian attack on Ukraine, the currency of our eastern neighbors began to depreciate sharply. So the Ukrainians began to massively exchange hryvnia for cryptocurrencies. First of all, on your home country Cryptocurrency market - Marten.

On February 24, 2022, the Kuna transaction volume increased by 300%. On that day, trading in cryptocurrencies on the largest Ukrainian stock exchange reached a record USD 4,1 million. At the same time, many Ukrainians were buying cryptocurrencies on the world's largest exchanges, which, according to experts, was the main reason for the rebound of the cryptocurrency rate, even at a time when stock indices - fearing an armed conflict that could spill over to other countries - were falling all over the world.

Fall in prices of the ruble and the hryvnia

The commencement of Russia's military invasion of Ukraine quickly hit the financial markets. The Russian stock exchange index immediately dropped by 40%, but the sell-off of shares is not everything. Fiat currencies were also discounted - mainly the Russian ruble, but the Ukrainian hryvnia also suffered, which after the first bombings of Ukraine reached the price of 30 for 1 USD, which was a record in the history of trading. 

No wonder that the Ukrainians began to exchange cash for whatever they could during the races, and above all for food products, weapons and medicines. Whoever had surpluses had to protect them. Many have opted for cryptocurrencies. Especially since virtual money has finally become legal in Ukraine for a week. 

Despite this, the increase in turnover was subtle after this decision, but it increased by leaps and bounds after the attack of Vladimir Putin's troops. Suffice it to say that on the eve of armed aggression on the Kuna exchange they ranged from 800 to 900 thousand. USD a day, and on February 24 they reached over USD 4,1 million.

Problems with cash withdrawal in Ukraine

National Bank of Ukraine also reacted to the crisis. In a panic, Ukrainians began to withdraw as much as possible from ATMs, which could shake the entire banking system in the country of our eastern neighbors. Therefore, the National Bank of Ukraine decided to introduce a withdrawal limit of UAH 100 (approximately USD 000 thousand) per day. There was also a ban on withdrawals in foreign currencies abroad (including in Poland) from accounts in Ukrainian banks. 

The hryvnia exchange rate begins to stabilize after the initial plunge, but it is hard to expect that the trend will be different than the downward trend in the near future.

Na Forex market the sale of the Russian ruble is also underway. Subsequent sanctions, especially economic ones, which are imposed not only by the European Union and the USA, but also by virtually all major countries, mean that the first intervention saving the currency exchange rate was made by the Russian central bank. However, everything indicates that it is not the last one, because even countries which so far have been closely related to it economically (such as Taiwan), but also openly supporting it - such as China, which is very reserved in its assessment of the conflict, are turning away from Russia. hardly anyone expected. 

So we should get used to the rapidly falling ruble in the near future - unless the Russian bank more often goes deep into its pockets and uses the accumulated reserves to save its exchange rate.

The reserves are huge. Russia has been preparing for such a scenario for years. A total of approximately $ 640 billion was collected. 32% is in euros, 16% in USD and 21% in gold. In the so-called The National Welfare Fund is $ 185 billion. They go there, among others surplus from the sale of crude oil. However, Russia spends 27% of the budget on arming and maintaining the army, so the financial possibilities of saving the ruble's exchange rate are also limited.

Exclusion from SWIFT Russian banks have already started, and according to today's announcements by the German Chancellor, these sanctions are to apply to all banks, not just selected banks, as previously announced. Pictures of long lines at ATMs are appearing more and more often in Russian social media. Could we face bank runs tomorrow and the collapse of the Russian financial system?

Help for Ukraine - also in cryptocurrencies

The Ukrainian government has started accepting subsidies in Bitcoin, Ethereum and USDT. The wallet addresses for deposits were posted via the official Twitter profile.