Crypto Haven? Digital Currencies in the Midst of War

Global News and Perspectives

Crypto and digital currencies are notorious for being volatile investments that fluctuate with the blowing of the wind. Why then is there an emerging debate about them being safe havens for investments especially after the breakout of war? We will examine a brief contextual history of cryptocurrency and examine arguments for and against them in general. Then we will examine both sides of this new debate and understand the two prominent perspectives that both proclaim and refute crypto to be the new safe haven or the “digital gold” of our time.

The heralds of crypto

Ever since Bitcoin was first founded in 2009, purveyors of cryptocurrencies and other digital currencies have commended it for its decentralised nature. Due to its highly volatile nature, crypto has often been relegated to a kind of experimental or comedic status in the world of stocks and investment. Crypto fans have fought back over the years by highlighting the many upsides to having a decentralised, peer to peer currency that is not controlled by any government or corporation but rather the users. They proclaim that crypto will be the future of all transactions as it has the ability to proliferate free markets completely devoid of government interventions. Furthermore, they are extremely helpful as buffer wealth when other, more traditional forms of wealth lose value (like inflation of a currency) or are inconvenient to own (like land or gold).

The swiss bank analogy

Many business analysts and finance aficionados have drawn an apt analogy between the crypto of today and the Swiss banks of the past. Like Swiss banks, crypto has deep coffers that cannot be interfered with by anyone’s economy or authority. However, since crypto is known for its insidious Swiss bank-like nature, many governments are finding means and measures to regulate its use. Recently, when some truckers in Canada raised money through crypto (as their bank accounts were being frozen), their crypto wallets were seized by the government in order to dissolve monetary aid to a protest. It is natural that more such scenarios will emerge as time progresses. And, since this is what makes cryptocurrencies special, it is postulated that we are bound to see the downfall of crypto in the long run, especially as and when governments and peoples around the globe find and invent new mechanisms to keep it in check.

Current Scenario

Currently, both sides of the war seem to have taken to crypto en masse. With the dramatic fall of the rouble, there have been bank runs. Similarly, in Ukraine, the status of war has made people nervous and they have begun to consolidate their assets. While gold has been a popular option for many, it is not feasible to convert all of one’s wealth into gold and keep it safe if you’re a travelling refugee. Hence crypto has been the answer. Furthermore, the vice president of Ukraine called for donations via crypto to help in the war effort. This resulted in about 70 million dollars’ worth of donations via crypto which greatly stimulated the crypto market. Many fear that Russian oligarchs will use crypto to escape the sanctions, though that has not been a major trend as of yet, it may become a reality once they catch on. Despite the heavy investment in crypto on both sides of the fence, it doesn’t seem to have climbed as much as people had expected.


The incredibly high inflation rate in the US and the consistent investment in crypto throughout the pandemic should have greatly stimulated it as well. Bitcoin saw its record high cost in November when it hit nearly seventy thousand dollars. Despite all these highly favourable conditions for the growth of crypto during the war, it seems to have fallen by about 10% in the last two days leading to scepticism of its messianic nature as the new “safe haven” or “digital gold”. Reporting on crypto 3 to 4 days apart will show drastically contradictory narratives about its projected path in the long run. One of the many downfalls of crypto is that it is still too difficult for everyday people to access and is really hard to understand for the layperson. With this milieu of factors pushing and pulling the value and use of crypto, it is safe to say the one thing that has remained consistent about the use of crypto is its highly volatile nature.

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Global News and Perspectives


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