Due To The Drop In Bitcoin Prices, Cryptocurrency Donations For Ukraine Are Also Decreasing

Donations to Ukraine in the form of crypto have also decreased. (photo: doc. pixabay)

JAKARTA - Ukraine, which has been torn by war for the past three months, plans to continue to tap crypto investors to help raise funds after falling cryptocurrency prices crushed the country's fundraising efforts in May.

Following Russia's invasion of Ukraine on February 24, the Ukrainian government used social media to solicit cryptocurrency donations. Deputy Prime Minister of Ukraine, Mykhailo Fedorov, even attempted to gather crypto investors this week at the World Economic Forum in Davos.

On March 19, the Ukrainian government said that the "Aid to Ukraine" fund had raised more than $60 million in cryptocurrencies. But two months later, on May 19, the total raised was worth $51.5 million, according to Ukraine's deputy minister of digital transformation Alex Bornyakov.

The value of the cryptocurrency itself has fallen sharply in recent weeks. Bitcoin has lost more than 20% of its price so far in May, following a 17% drop in April, highlighting the risks faced by holders of the highly volatile asset.

“All the funds raised in the “Aid to Ukraine” fund are held in cryptocurrency but the government was able to spend 45 million US dollars (Rp 659.2 billion) from it on Ukrainian army equipment before the “accident,” Bornyakov said in a written response to a Reuters question. .

Ukraine has funded its war effort in part with cryptocurrencies. The year before the war saw an increase in bitcoin donations to Ukrainian volunteer groups, some of which supplied equipment to government troops.

While cryptocurrencies could provide some much-needed funds, Kiev estimates it will need $15 billion over the next three months to help the war-torn economy recover.

Despite their volatility, crypto assets are still attractive to Ukrainians looking to raise funds. Even Ukraine's largest independent beer brand, Obolon, plans to sell non-fungible tokens (NFT) to help it distribute free water for humanitarian aid.

It follows in the footsteps of Ukraine's Ministry of Digital Transformation, which has raised 286 ether (approximately IDR 8 billion) with its online "Museum of War" NFT collection.

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

"This project directly helps us to continue to grow, because today the financial situation at the company is difficult because in Ukraine the economic situation is very difficult," said Olexander Chub, director of foreign trade at Obolon.