Bitcoin Ransom Demand Surges After Ukraine Invasion... Popular as Alternative Currency in Conflict Zones

Russian Rebels Turn to Cryptocurrency Amid Ruble Collapse

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] According to Reuters on the 28th (local time), cryptocurrencies like Bitcoin are gaining attention as alternative assets in conflict zones, with Bitcoin trading significantly increasing following Russia's invasion of Ukraine.

In the five days following Russia's invasion of Ukraine on the 24th, the price of Bitcoin rose by 13%. In the Asian market, Bitcoin prices surpassed $44,000 for the first time since the 17th.

Notably, Bitcoin trading in Russia and Ukraine has increased substantially compared to usual.

According to cryptocurrency trading analysis site Crypto Compare, on the day of the invasion, Bitcoin trading volume denominated in Russian rubles reached approximately $13.1 million (about 15.7 billion KRW) in dollar terms, a 259% increase from the previous day.

As the ruble's value plummeted to an all-time low, it is interpreted that Russian wealthy individuals identified Bitcoin as an alternative.

Ukraine is also effectively utilizing the advantages of cryptocurrencies.

At Ukraine's cryptocurrency exchange Kuna, daily trading volume reached $5 million (about 600 million KRW) in dollar terms, more than three times the usual amount.

Mykhailo Fedorov, Ukraine's Minister of Digital Transformation, posted a Bitcoin wallet address on Twitter, writing, "Please stand with the people of Ukraine. We accept cryptocurrency donations."

According to blockchain analysis firm Elliptic, the Ukrainian government and Ukrainian non-governmental organizations (NGOs) have received over $22 million (about 2.64 billion KRW) in cryptocurrency donations since Russia's invasion.

However, Reuters reported that while Bitcoin can be chosen as a currency in regions with geopolitical risks, there is disagreement over whether it can be widely used as a safe-haven asset.