You Need Crypto More Than You Think
Plus, get to Bitcoin 2022 Miami on my discount...
Talk to any crypto enthusiast, and they’ll often tell you how they like the sector because cryptocurrency can act as a major store of value for the people invested in it. In the same breath they’ll also often praise the borderless and portable qualities of the asset.
This is particularly true when talking about Bitcoin.
(I’m aware that some Bitcoin maximalists don’t like to lump Bitcoin into the same category as Ethereum, Cardano, and other altcoins. For the sake of broader comments, I talking about it all as one group.)
The borderless, portable, store of value arguments about Bitcoin and the rest have never really been tested on a large scale. Past disruptions, natural disasters, wars, and economic collapse have happened in a world where cryptocurrency was not a major investment class, particularly for the affected population. Any proof that Bitcoin and beyond had for these arguments was sketchy at best. Simply put, not enough users were impacted in order to confirm the theories.
Right now, in real time, we’re getting an answers to these questions.
What’s happening in Ukraine is horrific. You can see it with your own eyes. Millions are affected because of the actions of a few, and the cost is high. Lives will be lost, widows made, childhoods robbed, futures altered, and fortunes destroyed.
War is always a bad outcome for humanity. War is always a tragedy. And war is always a vacuum with no winners—despite what mythology says.
Even so, in the middle of this evil madness, the average Ukrainian has a tool they didn’t historically have before. They have cryptocurrency. The money they’ve stored in this asset class can travel with them as they navigate the unknown. All they have to do is throw their phone into their pocket, keep their wallet address safe, and make sure they know their private keys. An internet connection is all they need to access their money, no matter where they end up during this terrible disruption.
There are already reports that this has worked. Here’s just one of the many tweets and social media posts I read this weekend from affected Ukrainians:
On the flipside, cryptocurrency and Bitcoin also have the ability to help the average Russian. That country’s exclusion from the SWIFT banking system, the layered sanctions impressed on the ruling class, the overall cost of military conflict, and Russia’s exclusion from many aspects of global trade and culture will have huge, devastating impacts on the Russian population.
It didn’t take long for the panic to set in over the weekend.
On Monday, the ruble (Russia’s central currency) collapsed against the dollar (the global reserve currency). At one point, the ruble was worth less than a penny. To put it another way, it would take over 100 rubles to reach the exchange value of one dollar. In 2020, the average Russian made 51,000 rubles a month. Assuming that number is still the same, that means the average Russian now makes about $527. Just last week, one dollar equaled about 85 rubles, which was closer to $600.
Now, I want to note—the regular Russian citizen is not to blame for the disaster of this war. Their leadership is responsible for this hell, not them. They are victims too.
Once more, though, an option is available to Russians that was never available in the past. Bitcoin and cryptocurrency can help them as well. I understand it is harder to invest in this asset class in Russia than it is in other nations. I realize the Russian government has been lukewarm to crypto in the past. That hasn’t stopped average people in Russia from getting crypto wallets. They’re using Bitcoin too.
Governments cannot stop this. They cannot. In fact, price and volume moves for Bitcoin alone have been extraordinary in the last few days, indicating a surge of interest in the asset class.
You have to ask yourself—what happens if you find yourself in a similar situation to the one faced by Ukrainians and Russians? What if your life is altered by a cataclysmic event? What if you can’t access your bank account, credit cards, or cash from an ATM? What will you use as a store of value? What will be your rainy day asset?
In the past, people turned to gold and other precious metals for insurance against the unknown. Investing in those commodities was difficult, but proved safe and steady. Still, transporting and maintaining these assets could also be cumbersome. For example, a family fleeing a war zone with only what they could carry would find it almost impossible to transport large quantities of gold coins. Decisions would be made, and wealth would be lost.
Now, that family has another option.
We’re watching history in real time—war is always that. For cryptocurrency, this is another chapter in its short history, and this chapter is a big one. How the sector is perceived after this conflict will be notable. We may even be at a major turning point.
Stay tuned.
Plus…
If you’re interested in attending the 2022 Bitcoin conference in Miami, this newsletter is now an official affiliate! I’ve got a deal for you on tickets! Check it out here:
Finally…
My friend JT (and cohost of The Crypto Connection Twitter Space on Monday nights) started a newsletter. He’s sharing some great analysis! Check it out here:
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.