Cryptocurrency crash devalues ​​Ukrainian government’s crypto fundraising

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Bitcoin has fallen sharply from its November 2021 peak.

CFOTO | Future publication via Getty Images

Ukraine, battered by three months of war, plans to continue to appeal to crypto investors to help raise funds after a price crash decimated the country’s fundraising efforts in May.

Following the Russian invasion of Ukraine on February 24, the Ukrainian government took to social media to ask for cryptocurrency donations. Ukrainian Deputy Prime Minister Mykhailo Fedorov sought to rally crypto investors this week at the World Economic Forum in Davos.

On March 19, the government fund “Aid for Ukraine” said it had raised more than $60 million in cryptocurrency. But two months later, on May 19, the total raised was $51.5 million, said Ukrainian Deputy Minister for Digital Transformation Alex Bornyakov.

Cryptocurrencies have fallen sharply in recent weeks. Bitcoin has lost more than 20% of its price so far in May, following a 17% decline in April, highlighting the risks faced by holders of highly volatile assets.

All funds collected in the “Aid for Ukraine” fund were stored in cryptocurrency, but the government was able to spend $45 million of them on equipment for the Ukrainian army before the crash, Bornyakov said in written responses to questions from Reuters.

Ukraine financed its war effort partly with cryptocurrencies. The year before the war saw an increase in bitcoin donations to Ukrainian volunteer groups, some of which provided equipment to government forces.

While crypto can provide much-needed funds, kyiv has estimated that it needs $15 billion over the next three months to help its war-torn economy recover.

NFT for water

Despite the volatility, crypto assets still attract Ukrainians looking to raise funds.

Ukraine’s largest independent beer brand, Obolon, plans to sell non-fungible tokens (NFTs) to help it distribute free water for humanitarian aid.

It follows the lead of Ukraine’s Ministry of Digital Transformation, which raised 286 ethers (about $550,000) with its online “Museum of War” NFT collection.

Obolon plans to sell 5,000 NFTs for 0.1 ether (about $200), which can be exchanged for a commemorative beer bottle after the war.

“This project is directly aimed at helping us to continue to evolve, because today the financial situation of the company is difficult because in Ukraine the economic situation is very difficult”, said Olexander Chub, director of foreign trade of Obolon. , in a video interview.

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