In this article, we discuss the top 10 gainers in cryptocurrencies after the Russia-Ukraine war.
The Russian invasion of Ukraine has once again brought cryptocurrencies into the limelight as both sides use blockchain technology to navigate the complexities of warfare. For the Ukrainians, cryptocurrencies are another source of funding the resistance efforts. For the Russians, the unregulated crypto industry is a hedge against Western sanctions, at least for the time being. The Ukrainian government has received significant crypto asset donations since the start of the war, amounting to more than $54.7 million in value.
Ukraine: Crypto Hub Deploys Virtual Assets Against Russian Aggression
Ukraine is a country that is renowned globally for the technology-related talent it possesses. In 2021, the tech exports of the country were close to $7 billion. It is also one of the most crypto-friendly places on the planet, behind only Vietnam, India, and Pakistan on the Global Crypto Adoption Index. It is estimated that $8 billion worth of crypto passses through Ukraine annually. In 2021, the country officially legitimized cryptocurrencies but stopped short of adopting a coin as legal tender.
Merely a few days after the war, the Ukraine government officially launched a crypto wallet and appealed for donations to fund the war efforts, initially only accepting Bitcoin, Ethereum, and Tether as payment. It also simultaneously announced the Aid for Ukraine project in collaboration with the Solana network. Coins like Uniswap, Polkadot, and many others are now being accepted as well. On March 3, Mykhailo Fedorov, the vice prime minister of the country, announced that Kyiv would soon launch NFTs to support their soldiers.
Even though many cryptocurrencies registered steep drops on the day of the invasion, they have since climbed as the role of the new technology during the war becomes clearer. Some of the top crypto stocks like Visa Inc. (NYSE:V), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL) are also witnessing heavy volumes in this context.
Our Methodology
These were picked from a careful assessment of the cryptoverse amid the Russian invasion of Ukraine. The details of each cryptocurrency are mentioned alongside a discussion around top companies working in the sector to provide readers with some context for their investment decisions.
Data from around 900 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Cryptocurrencies After Russia-Ukraine War: Top Gainers
10. Cosmos
Cosmos has surged in the past few days as investors absorb the impact of new partnerships, including deals with Polkadot and Aster blockchains. The agreements have increased the liquidity of the coin and helped bring the ecosystem into more focus in the crypto world. One of the key advantages of the Cosmos network is the scalability and interoperability it offers, a characteristic in high demand following the Russian invasion of Ukraine, as citizens of the two countries switch from regular currency to crypto to safeguard their assets.
Coins like Cosmos are gaining mainstream recognition through the efforts of businesses like Alphabet Inc. (NASDAQ:GOOG), the parent company of Google. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.9 million shares worth more than $8.5 billion.
Just like Visa Inc., Block, Inc., and PayPal Holdings, Inc., Alphabet Inc. is one of the crypto stocks on the radar of elite investors.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet Inc. among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet Inc. as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
9. Polygon
Interest in the Polygon coin has increased amid the Russian invasion of Ukraine since there are precedents for it being used to provide relief in disaster situations. Polygon co-founder Sandeep Nailwal founded the Crypto Relief Fund in 2021 to help India, one of the largest crypto markets in the world, with COVID-19 relief. The fund managed to gather over $57 million for the purpose. The coin is also being used by anti-war Russians to donate to relief funds set up to help the people of Ukraine during the war.
The popularity of coins like Polygon has increased dramatically with the help of established firms like CME Group Inc. (NASDAQ: CME), the Illinois-based derivatives exchange that accepts crypto trades on the platform. At the end of the fourth quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in CME Group Inc., compared to 64 the preceding quarter worth $2.6 billion.
In its Q1 2021 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and CME Group Inc. was one of them. Here is what the fund said:
“CME Group Inc. has been owned by the portfolio for five years. CME’s strategic positioning as a monopolistic global financial exchange operator will continue to afford the business a highly attractive margin profile. CME Group Inc. is well managed however we can no longer identify clear value latency opportunities for the management team to execute against and so decided to exit our position.”
8. Dogecoin
Although Dogecoin was launched as an elaborate joke, the currency has come a long way from “meme” beginnings in the past few years. On March 2, Mykhailo Fedorov, the vice prime minister of Ukraine, took to Twitter to reveal that the Ukrainian government was now accepting donations in Dogecoin for the Aid for Ukraine program. The coin has also climbed above the Russian ruble in value after US-backed sanctions on Russia. Fedorov also urged Elon Musk to help the call for donations in Dogecoin. Musk is a long-term admirer of the coin.
Dogecoin is slowly transforming from a meme into a real-life commodity, especially as people like Musk, the owner of Tesla, Inc. (NASDAQ:TSLA), support it on social media. At the end of the fourth quarter of 2021, 91 hedge funds in the database of Insider Monkey held stakes worth $12.9 billion in Tesla, Inc. (NASDAQ:TSLA), up from 60 in the previous quarter worth $10.6 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. Tesla, Inc. stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
7. Terra
Terra has climbed in value after the Russian invasion of Ukraine, as investors in Russia and Ukraine look towards stablecoins to protect their wealth from the volatility in local markets. The Terra coin is not as popular as other stable coins like Tether and also uses a different mechanism to keep prices stable. It is not backed by a reserve of the US dollar but by $1 billion in Bitcoin. The price of the coin is kept stable by the minting and burning process for LUNA, the network on which it operates.
Terra and other cryptocurrencies like it are becoming more visible to investors as firms like Mastercard Incorporated (NYSE:MA), the New York-based payments processing firm, double down on their crypto bets. Among the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA), with 5.8 million shares worth more than $2.1 billion.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard Incorporated make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
6. Solana
Solana has been perhaps the most prominent gainer from the Russian invasion of Ukraine. The Solana network was one of the first blockchain platforms to launch a relief effort for Ukraine through the Aid for Ukraine project. The project is a collaboration between the Ukrainian government, Everstake, and Solana. Mykhailo Fedorov, the vice prime minister of Ukraine, has recently tweeted about the project in a public appeal for funds to help the victims of the Russian war in Ukraine.
Coins like Solana are being mined using the powerful hardware developed by NVIDIA Corporation (NASDAQ:NVDA), the microchip maker from California. At the end of the fourth quarter of 2021, 110 hedge funds in the database of Insider Monkey held stakes worth $10.4 billion in NVIDIA Corporation (NASDAQ:NVDA), up from 83 in the previous quarter worth $10 billion.
In addition to Visa Inc., Block, Inc., and PayPal Holdings, Inc., NVIDIA Corporation is one of the crypto stocks popular among institutional investors.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation was one of them. Here is what the fund said:
“NVIDIA Corporation is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA Corporation and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA Corporation reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA Corporation to the portfolio.”
5. Polkadot
Polkadot has surged amid the Russian invasion of Ukraine as Gavin Wood, the founder of the coin, publicly lends his support to the Ukrainian people and urges action, leading by example and donating $5 million to the Ukraine government to help in the fight against Russia. Mykhailo Fedorov, the vice prime minister of Ukraine, has tweeted his gratitude to Woods as well. Polkadot has also opened a special wallet for fundraising for Ukraine where people can donate their crypto. The Ukraine government is accepting the coin through their aid program too.
Polkadot had been in a steep decline over the past few months amid a broader lull around cryptocurrencies as inflation and regulatory fears clouded the market. However, developments in Ukraine and the public donation by Woods has helped the coin climb higher. The social prominence of the coin has also increased following the Ukraine crisis.
4. Ripple
Ripple is one of the coins gaining importance as the war spreads to major Ukrainian cities. Ripple is one of the most popular coins for cross-border payments. As Western nations sanction Russia and Ukraine moves to broaden the support for crypto to support the war efforts, both countries have seen a massive surge in prices of currencies like Ripple. Russian businessmen are using the coin to navigate the sanctions while Ukrainians use it to fund the war. The price of the coin, after being flat for months, is up over 2% since the invasion.
Ripple is also important to the crisis because it already has partnerships with over a hundred banks around the world. This global reach increases the appeal of the coin to people who are using it as a workaround to the SWIFT payments system since it enables seamless transfer between different currencies at lightning fast speeds.
3. Ethereum
Ethereum is one of the most popular crypto coins in Ukraine. An Ethereum-based group in Ukraine recently auctioned off an NFT of a Ukrainian flag that sold for more than $6.5 million, making it the tenth-most expensive NFT across the globe. The crypto wallet of the Ukraine government for help related to the war had reached over $20 million in contributions from Bitcoin and Ethereum alone on March 2. This surge around the coin has calmed investors who had been dumping the coin as inflation battered the market.
Ethereum-based donations from prominent people like Celsius founder Alex Mashinsky have also helped the coin climb higher as people follow suit and interest around the currency increases. Investors have also been buoyed by statements of Vitalik Buterin, the founder of Ethereum, on the crisis. Buterin, who is of Russian origin, has condemned the war and vowed not to be neutral in it.
2. Tether
Tether has also witnessed a massive increase in trading volume and an accompanying boost in price after the Russian invasion of Ukraine. It was one of the first cryptocurrencies accepted by the Ukrainian government as it appealed for funds from across the globe. The Tether coin, which usually trades around $1, is trading at way above this rate on crypto exchanges in the war-torn Ukraine.
Interest in Tether has also increased in Russia where sanctions by Western nations have literally floored the banking system and people are looking at alternative ways of managing their money and other assets. Threats of inflation in Ukraine have also forced people to look towards investments in Tether.
1. Bitcoin
Bitcoin is the most popular crypto coin in Ukraine. Since it is also the most popular coin across the globe, it has been the most-traded coin on both sides of the conflict as Ukraine uses it to facilitate donations for the war effort while Russians use it as a hedge against inflation and Western sanctions. Bitcoin-based payments have already helped the Ukrainian government raise tens of millions for the war.
Bitcoin has jumped to $42,397 after falling to as low as $36,370 in late February. This dramatic increase has come despite a 8% drop in the price of the coin on the day following the invasion. Since the US sanctioned Russian banks, however, the coin has been on a consistently upward trajectory and is likely to remain there for the remainder of the war.
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This article is originally published at Insider Monkey.