Cyberattacks and oppressive regimes stoke crypto use
The growth of cryptocurrency is not linear. During crises, when there is a loss of trust in traditional systems, it spikes. Key triggers include:
1. Hyperinflation and Currency Collapse
When inflation runs out of control or a currency collapses, people in a country will often turn to cryptocurrency as a store of value.
Examples:
- Since 2018, Venezuela has been seeing hyperinflation above 1,000,000%, leading many to adopt Bitcoin and stablecoins (like USDT).
- In 2023, Zimbabweans turned to mobile-based crypto platforms after repeated devaluations of their country’s currency.
The cases demonstrate the impact of crypto in countries where fiat currencies fail to act as a store of value.
2. War and Sanctions
Geopolitical tensions and sanctions disrupt banking systems, leading individuals and businesses to look for alternatives.
Examples:
- Ukraine-Russia Conflict (2022): Between Ukrainian refugees and Russian citizens affected by internationals, many turned to crypto for cross-border payments and fundraising. Ukraine receives over $100 million in crypto donations for the war effort.
- Iran (2023): Resilient Iranian entrepreneurs employed cryptocurrencies to navigate severe trade sanctions and maintain participation in global trade.
In the face of adversity, crypto becomes a lifeline for financial inclusion.
3. Inflation and Loss of Trust in Central Banks
Inflation is rubbing off on the faith in the central bank, leading the investors to hedge against this.
Examples:
- In the post-pandemic inflation surge, many retail investors began to buy Bitcoin, popularly referred to as “digital gold,” for protection against a depreciating dollar.
- In Argentina, people increasingly purchased stablecoins or cryptocurrencies to protect their savings due to annual inflation approaching 150% (2023).
The implication is that cryptocurrencies now enjoy the status of an asset that is not restricted by borders or government authority.
Digital Utopianism: The Ideological Shift
In addition to the practical use cases, the global crisis also builds an overarching ideology that cryptocurrencies would be part of a digital utopia free of corruption, censorship, and control.
1. Decentralization as Liberation
To many people, blockchain is a route to emancipation from state and financial oppression.
Just after the Taliban takeover in Afghanistan in 2021, women started using cryptocurrency to overcome bans on female employment and education.
Narratives similar to this one build the image of crypto as an empowerment and freedom force.
2. Community-Driven Optimism
Cryptocurrency groups are founded on common ideals that focus on decentralization, transparency, and inclusiveness. Newcomers seek alternatives to broken systems during crises due to resonating value.
For example, Gitcoin DAO and PleasrDAO direct the sources toward social causes, which can positively build the perception of crypto.
Capital Inflows: Crisis-Driven Investment Waves
Global crises always create spikes in crypto investment by both retail and institutional players.
1. Retail Investors Fleeing Instability
Regular individuals are turning to crypto as a safe haven. For instance:
- The banking crisis of 2022 caused small depositors to move funds into self-custodied wallets containing bitcoin and stablecoins.
2. Institutional Interest in Safe Havens
Institutions are using crypto as a diversification option with macro uncertainty.
- MicroStrategy made headlines when it purchased billions worth of Bitcoin as a treasury reserve asset during high inflation.
- BlackRock launched an application for a spot Bitcoin ETF in 2023. This shows that an increasing number of institutions are confident in Bitcoin.
Challenges and Skepticism
While crises can create opportunities, they also create vulnerabilities.
- Price volatility keeps risk-averse users away: crypto analysis.
- Governments worried about capital flight may impose restrictions limiting access.
- People are robbing, scamming and cheating others out of their money during this pandemic.
Conclusion: Emergency to Assurance
When the global crises meet crypto adoption, it means that humans gear up to find alternatives when the system fails. Millions are moving towards crypto either out of necessity, ideology, or for profit. It is now a symbol of hope and resilience.
As the crises continue to unfold—the wars and climate disasters—the continuing influence of cryptocurrencies will only increase. What are the flaws of crypto? (33 words):
Many people think the faults in crypto are just bugs that need fixing. But in reality, it’s a deeper problem: a speculation system that has harmful effects and is incapable of producing vital things.
Conclusion
The ongoing crises in the war, inflation, and economy are attracting a fresh wave of crypto investors, leading to new capital inflows. They create a “digital utopianism” narrative, which presents crypto as the decentralized alternative to failing traditional systems. The continuing volatility and regulatory hurdles do not have much impact on the crypto boom that is bringing in a lot of users and institutional interests. Cryptos are offering real-world applications as well as ideological alternatives in times of crisis.
