In Ukraine ‘Crypto is King’

By: Adam Sharp
Editor, The HIVE Newsletter
Nasdaq: HIVE | TSX: HIVE

The good news is that real-world adoption of Bitcoin and Ethereum appears to be advancing by leaps and bounds.

The bad news is… crypto seems to be getting more popular due to widespread:

  • Inflation
  • Warfare (economic and kinetic)
  • Distrust of institutions

It is during times like these when we see the true utility of cryptocurrencies. They are scarce, divisible, and liquid. Importantly, they are also apolitical and largely uncensorable.

To understand further, let’s look at the role crypto is playing in Ukraine.

Even before the war, Ukraine was rated as the #1 country for crypto adoption, according to a 2020 report by Chainalysis. That analysis factored in on-chain transaction volume, peer to peer trading, and deposits.

Russia’s invasion seems to have catalyzed a further spike in usage. 

‘Crypto is King’

Last week Bloomberg’s Alastair Marsh released a fascinating interview with Ukrainian crypto entrepreneur Michael Chobanian. 

We’ll review key snippets from the interview shortly, but first, a little background.

Chobanian, 38, founded Ukraine’s largest crypto exchange, Kuna

According to stats from, in a recent 24 hour period, Bitcoin had the most volume by far with around $2.4M in USD trades. ETH is second with $1.1M in volume, and nothing else is close.

On March 1 Reuters reported that volume on Kuna has tripled since before the invasion. That’s just one local exchange. 

Major international players such as Binance also operate in Ukraine. Additionally, the vast majority of transactions are likely P2P and B2B.

It’s worth noting that the most popular trading pair on this Ukrainian exchange is BTC/USDT. This pair allows trading between Bitcoin and Tether stablecoins, which are pegged to the US dollar. Clearly, the greenback is still playing a role here, but it may be declining, as we’ll see below.

Another takeaway is that Bitcoin appears to be the frontrunner. It has a number of attractive qualities for such a situation.

  • Best global liquidity and cash-out options
  • Stellar security record
  • Fast with $1.87 avg transaction fee
  • Inflation hedging aspects

But Ethereum also puts up an impressive showing at #2 in terms of volume on Kuna. This may further the idea that ETH is becoming a monetary asset.

Real World Adoption in Ukraine

Today Mr. Chobanian is also in charge of the Ukrainian government’s crypto reserves. Ukraine has collected more than $60 million in BTC and ETH that was donated from around the globe. 

Let’s take a look at some excerpts from Bloomberg’s interview with this founder. 

My role is to supply my people with all the necessities that they require and make sure that we can pay as fast as possible. It takes 10 minutes for a Bitcoin block to close [average confirmation time for a Bitcoin payment]. 

And it takes about three days to do the same thing through the banking system…

So three days vs. 10 minutes—therefore, we prefer crypto.

Chobanian goes on to explain how the war has accelerated adoption of crypto.

You could say that I was preparing for this. I knew that there would be a time in the future when crypto would play a vital role. I never imagined it would be because of a war, that was definitely not my plan. I had hoped there would be a more peaceful way.

“I had hoped there would be a more peaceful way”. Indeed.

Chobanian then shines a light on the falling role of cash and US dollars in Ukraine.

Cash, U.S. dollars, in Ukraine are pretty much useless. No one wants them. Prior to that, dollars were the main payment method for the OTC market. Now considering that you can’t really move cash outside of the country and you cannot store it securely, no one really wants it. 

Of course, Mr. Chobanian is deeply embedded in the crypto world, so his view may be a bit biased. But it’s interesting nonetheless.

The crypto entrepreneur then expounds on how quickly crypto has become Ukraine’s preferred method of payment.

Now the most valuable form of money in Ukraine is crypto. Everyone wants crypto because this is the fastest, the most flexible, easiest, and least bureaucratic way to store and spend your money. 

Crypto is the new king of money in Ukraine.

Towards the end of the interview, Chobanian gives insight into how views on crypto have shifted amongst banks and government.

The fundamental change is that, before the war, there were a lot of skeptics, especially in the government, in the banks, and in the military. Now there is no skepticism because they understand that we save lives every single minute with crypto.

It sounds like the Ukrainian financial establishment became crypto believers overnight. Now they understand the utility. 

This is another light bulb moment of realization, as we discussed in Bitcoin: Echoes of Cyprus and 2013. I suspect there may be a series of these realizations over the coming years, all over the globe.

Let’s also consider all the people who were able to escape Ukraine with their Bitcoin stored on a hard drive, or in their mind as a seed phrase. The fate of their equities and fiat currency is uncertain, but BTC is sovereign and traded globally.

Outside Ukraine, crypto adoption seems to be growing due to widespread inflation and distrust in institutions. Unfortunately these issues may persist for a while.

But it is encouraging to see these nascent decentralized financial systems begin to fulfill their potential. They may have a big role to play over the next few years.

HIVE will be there, providing reliable infrastructure for these decentralized financial networks.


Adam Sharp

Editor, The HIVE Newsletter

P.S. Be sure to check out our March production update, where we announce reaching 2 Exahash of Bitcoin mining and 6 Terahash of ETH mining. 

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