The latest frontier in the crypto culture wars: actual war

As Russian troops invaded Ukraine, cryptocurrency influencers had one familiar question: how would this affect crypto? Unsurprisingly, the answer came, it’s good for crypto.

In making this observation, I do not wish to diminish the significance of what is happening in Ukraine. Dozens of lives have been lost. This conflict threatens to tear the world apart. It’s awful and gut-wrenching. That’s why it’s so galling that crypto-boosters are taking this opportunity to promote cryptocurrency.

On top of being so incredibly tone deaf, so far it appears to be wrong! One of the major selling points of cryptocurrencies such as Bitcoin has been that they reduce reliance on individual sovereign nations. An act of war should be the perfect use case for a product like this — a financial safe haven.

And yet as Russia crept towards launching an invasion over the past couple of days, cryptocurrency prices were in freefall. Despite the often-made comparison, the price of gold — a traditional safe store of value — has spiked over the same period.

In fairness to cryptocurrencies, they have served some purpose. Hundreds of thousands of dollars have been sent to a Ukrainian nongovernmental organisation providing support to armed forces in the 12 hours since the country was invaded. 

Another purpose which cryptocurrencies have served during the conflict is helping people avoid sanctions. As one anti-money laundering compliance expert told CNN: “if the Russians decide — and they’re already doing this, I’m sure — to avoid using any currency other than cryptocurrency, they can effectively avoid virtually all of the sanctions”. Cool!

But all of this — the pain, the suffering — gets swept up into the prism of whether or not it’s good for cryptocurrency (and, it’s left unsaid but is obviously the case, the fortunes of those people who own it).

Crypto is now one of the biggest culture wars of 2022. And not even a real war can stop it.