War zones are difficult places to get money into and out of.
As Russian forces lay siege in the Ukraine over the past two months, the central bank of Ukraine attempted to mitigate risk by suspending currency and equity trading. Digital money transfers were halted too.
Viral videos circulated of residents in both countries scrambling to withdraw funds from ATMs and banks in anticipation of potential economic calamity — leading to fears of bank runs. On February 24, the National Bank of Ukraine employed a withdrawal limit of 100,000 hryvnia, or about $3,339 per day.
In moments of chaos, when people are unable to gain access to their money from financial institutions they’ve historically used, where does cryptocurrency fit in?
It could lead to adoption for the digital asset class, Arca cofounder and chief investment officer Jeff Dorman told Insider.
“What we thought used to be our money, if it’s sitting in the bank, is not actually our money,” Dorman said. “It’s the government’s money and whether or not they decide to let you have it is their decision.”
Geopolitical unrest could lead to a sizable jump in bitcoin’s price as well.
The largest crypto by market cap , Dorman said, could hit $300,000 in the next two years. This would require a jump of 765.4% from its price on Tuesday near $39,193, according to blockchain research firm Messari. Bitcoin has previously experienced a spike of this magnitude in less than two years: between March 2020 and November 2021, when it rose 1,285%.
But Dorman is not the only person making long-term bullish calls on price action.
ARK Invest founder Cathie Wood said that the token would hit $1 million by 2030. 10T cofounder Dan Tapiero —the Wall Street vet who runs a crypto-focused private equity firm — also said that the crypto could hit $500,000 in the next five years.
Ambitious forecasts, however, don’t always pan out.
Morgan Creek Capital Management CEO Mark Yusko previously told Insider in 2019 that bitcoin would top $100,000 by 2021. Yusko cited bitcoin’s network, store of value, fundamental growth metrics, and ability to mitigate income inequality as a catalyst. The crypto, instead, notched a high of $34,810 in December 2020.
Bitcoin made a run for the widely predicted $100,000 level last year but peaked just above $69,000. Still, Dorman and other experts still see that price as attainable, partly because of political factors.
On March 16, Ukrainian President Volodymyr Zelensky signed into law a bill on digital assets, which detailed their legal classification and regulators. Then on April 22, Ukraine’s central bank banned the purchase of crypto in its local currency with exceptions for foreign currencies.
Per a Coindesk report, the Ukrainian government posted wallet addresses to accept donations two days after the invasion, garnering roughly $100 million worth of cryptocurrency.
“Crypto really helped during the first few days because we were able to cover some immediate needs,” Alex Bornyakov, a Ukraine deputy minister for digital transformation, said.
The unrest, Dorman says, could lead to citizens on both sides turning to less centralized means of accessing funds.
“I think the history books will talk about February, March and April of 2022 as a really big inflection point for why people care about bitcoin,” Dorman said. “People are going to recognize that there’s real value in a bearer asset like this.”
Dorman started $600 million crypto asset manager Arca with WisdomTree cofounder Rayne Steinberg in 2018. Before that, he had a 20-year-career on Wall Street, working at Lehman Brothers, Merrill Lynch and Citadel Securities.
“All the alpha is gone in stocks and bonds,” Dorman said. “There’s a ton of alpha in digital assets, because people haven’t figured out how to value these things yet.”
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