We used to think that war profiteers were people who made money by selling weapons and other goods to warring parties, but that is no longer the case. They are also among those who benefit from the digital economy. As money is deeply associated with war, it has always made and bred (besides the destruction) hundreds of billions for individuals, enterprises, and the economy in general. There have been dollars gained somewhere for each soldier who didn’t make it back home.
The concept of modern warfare is no different. It’s only the currency that differs. Every other major event in the world nowadays is largely driven by virtual currency, and the digital economy; and the tension among both Ukraine and powerhouse Russia is no exception.
Across many sides of the conflict, the last several weeks have been intense. Ukraine has been invaded and bombed, and Russia was sanctioned by some of NATO’s most powerful countries, causing its economy and trade to suffer. Markets, of course, reacted, and some of the share prices and cryptocurrencies went through ebb and flow.
Digital currencies:
Bitcoin went up owing to its active participation in the Ukraine-Russia conflict; Waves, the Ukrainian-led crypto, was equally on a positive “all-green” track. Seesaw Protocol also managed not only to be negatively affected by the war (as other cryptos have) but to rise by +32 percent in only one week in March 2022.
Bitcoin (BTC): Sanctions imposed on Russia by the US, the UK, and others have targeted the Russian central bank and national wealth fund. The ability of Russian President Vladimir Putin to use the country’s $630 billion in foreign reserves had been severely limited. Furthermore, some major Russian banks were removed from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), resulting in a loss of the country’s economic condition and spending power. Bitcoin (BTC) has returned to its former glory. In the existing crisis, it is playing an important role. The demand for this cryptocurrency has increased, and its valuation has risen yet again.
- On 20th February 2022, the starting date of the Russia-Ukraine conflict, BTC’s closing price was $38,431.38, and throughout the war, the prices continued to go up by breaking the $44,000 level multiple times.
Waves: On 20th February 2022, the starting date of the Russia-Ukraine conflict, WAVES’ closing price was $9.39, and throughout the war, the prices continued to go up by breaking the $45 level multiple times.
- WAVES was founded by Ukrainian scientist Alexander Ivanov.
- Following the announcement of plans to make a blockchain-agnostic Metaverse and a new collaboration with Allbridge to enable cross-chain transactions, the price of WAVES ramped up by more than 100%.
Seesaw Protocol (SSW): It is a non-custodial decentralized and multi-chain ecosystem of DeFi (Decentralized Finance) products. With its added Metaverse apps, the Seesaw Protocol (SSW) connects the Binance Smart Chain (BNB), Polygon (MATIC), and Ethereum (ETH) blockchains, allowing users to transfer tokens between them. It allows customers to select the platform that has the lowest gas fees.
- SSW has grown by over 1300 % in less than a month and sold more than 75% of the tokens during the first presale simultaneously. Its value has risen sharply by 30%, indicating that it has come a long way.
Commodities:
Commodity prices in global markets have been rapidly rising sharply since the end of February, reaching an all-time high in March, recreating a similar trend in Indian markets.
Gold & Silver: Precious metal prices have gained a safety net in the face of global uncertainty. The markets are currently quite bullish, but traders who purchased gold prior to February of this year, when prices were still under pressure, have made reasonable profits.
- On February 21, 2022, the price of gold was 1,278 USD/T, and prices continued to rise throughout the war, breaking the 2052 USD/T level on March 8, 2022, and reaching an all-time high.
- The price of silver was above 23 USD/T on February 21, 2022, and it skyrocketed throughout the conflict, breaking the 26 USD/T level on March 8, 2022.
Crude Oil: Among all of the strategic, geopolitical, and humanitarian concerns, rising crude oil prices and their impact have received a lot of attention. The world suspected that the war would result in a ban on Russian oil in the West. Even before the US and the UK banned Russian oil and gas imports, some countries halted purchase decisions, whereas others started panic buying.
- On March 7, prices reached a 14-year high of $140 per barrel.
Metals: The fear that the world will run out of ferrous and non-ferrous metals as a result of the Russia-Ukraine conflict has caused a spike in their prices. Between February 23 and March 8, three-month nickel futures on the London Metal Exchange (LME) increased by 97%, zinc by 16%, aluminum by 6%, and copper by 3.5%.
- Nickel was above 24820 USD/T on February 21, 2022, and it continued to rise, having broken the 48340 USD/T level on March 7, 2022.
Edible Oil: Edible oil prices have risen as imports from Russia and Ukraine have ceased due to the ongoing conflict. Sunflower oil is primarily imported into India from Ukraine and Russia. Furthermore, for the first time, palm oil has become the most expensive of the four major edible oils as consumers rush to preserve alternatives for sunflower oil shipments from the top exporting Black Sea region that was affected by Russia’s invasion of Ukraine.
- India imports 25 lakh tonnes of sunflower oil each year, with Ukraine accounting for 74% and Russia accounting for 12%.
- Palm oil was trading above INR 1,270/g on February 21, 2022, and it continued to rise, surpassing INR 1,480/g on March 8, 2022.
Food: The invasion of Russia has seriously affected trade from Black Sea ports, driving global Chicago benchmark wheat prices to 14-year highs. Russia and Ukraine are responsible for 30% of global wheat exports and 20% of global corn exports, respectively.
Wheat futures were trading above INR 2,100/10 metric tonnes on February 21, 2022, and continued to rise, inevitably crossing INR 2,350/10 metric tonnes on March 10, 2022.
Writer: Arpita Chatterjee
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