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COINS OF WAR?
What cryptos have performed best during the Russia-Ukraine conflict?
That’s the subject of a new study, which examined the reaction of cryptocurrency markets to the war, which has reverberated the world over with economic and geopolitical ramifications.
A group of French university researchers say their empirical findings show that Binance Coin, associated with a blockchain operated by the world’s largest international crypto exchange (as reported by Coinmarketcap.com), has been winning the battle of holding value.
According to the paper’s abstract:
“Our findings indicate that except for Binance coin, cryptocurrencies have negatively reacted to the war, but at different scales. For Binance coin, positive abnormal returns are reported. Our findings hold over the post war announcement period and when using alternative measures of abnormal returns based on different asset pricing models.”
The paper noted that cryptocurrencies have figured into the conflict in various ways. Russia has been accused of utilizing cryptos to circumvent sanctions, though the country has taken much more obvious and monumental steps to thwart them.
Ukraine meanwhile, says it has benefited from crypto donations to its cause.
Researchers focused on ten top crypto coins including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Luna (LUNA), Cardano (ADA), Avalanche (AVAX), Solana (SOL), Binance Coin (BNB), Dogecoin (DOGE) and Polkadot (DOT).
They used a specific methodology to determine “abnormal returns” (ie. returns which were not explainable by normal factors), over a period from when the war broke out, and into April 2022.
The results of the research found that:
“9 out of the 10 cryptocurrencies have reacted negatively to the war. The only exception is Binance coin for which the reaction to war seems to be economically and statistically positive.
“The magnitude of the negative reaction of cryptocurrencies markets to the Russian invasion of Ukraine seems to change from one cryptocurrency to another. The highest negative reactions are obtained for Avalanche, Polkadot and Solana while the lowest reaction is reported for Bitcoin, the most established cryptocurrency.”
The full paper can be viewed here.
COINDESK HIGHLIGHTS “FUTURE OF WORK”
CoinDesk has been in the midst of a “Future of Work” series covering different aspects of how crypto technology is fast changing how work gets done, especially for a younger generation growing up with it.
An interview with journalist Laura Shin focused on the ways in which the crypto sector is destined to make financial transactions between people as routine and seamless as social media has made communications over the last decade.
Shin is noted for chronicling the rise of Ethereum with a contemporaneous book on the subject in 2015 titled The Cryptopians.
She told CoinDesk that crypto is allowing people to develop income streams that give them more freedom and autonomy than working for a single employer, and that this model will only develop further with web3 technologies.
“I feel like with crypto we’re gonna probably just have a lot more financial transactions in our lives. Similar to how we went from snail mail, a corded phone, to one I carry with me all day with multiple apps where people can communicate with me. I think the same thing is gonna happen to financial transactions in the future. People will just have many more ways of transacting financially with people all over the world.”
Other interesting “Future of Work” articles heavily focused on how DAOs (Decentralized Autonomous Organizations) are having a greater impact on the way productivity is organized.
They are transforming payroll and accounting, providing financial services for previously unbanked individuals in third world regions, and more.
The impact of metaverse and NFT technologies on the art and fashion industry were also covered.
One of the interesting takeaways is that even during the current huge downturn in the crypto sector, there is a lot of activity and innovation happening. The younger generation isn’t off cryptos. Not by any stretch of the imagination.
“Finding a stable job, getting married, buying a house … these are just not my thing,” Lin Chuan, a Chinese national techie drawn to the web3 developer space was quoted in a piece called “Young Web3 Believers Unfazed by Battered Crypto Market.” “I look for flexibility, freedom and a faster career path … and this space is just like that, and with little office politics or nepotism. It is about your individual abilities – you get rewarded for what you can do.”
CoinDesk also put out a piece on “The Crypto Jobs Boom”—pretty audacious, considering the two-thirds nose-dive in market cap valuation of the sector since the start of 2022.
But current economic conditions haven’t changed an overall dynamic that is seeing more movement of talent and traditional industries into the crypto space.