An interesting article was published in the New York Times today. In the article, it was questioned why the price of Bitcoin did not increase in such a period when we were in the middle of macro-scale chaos and inflation.

Praised by its defenders as a safe haven in times of uncertainty, the value of Bitcoin has fallen steadily in recent weeks.

For years, in the face of critics who questioned the value of Bitcoin, Bitcoin advocates would respond by saying "just wait".

For years, it has always been said by Bitcoin advocates;

   “Wait until inflation drops and people invest their savings in a stable digital asset that will not lose its value. Wait until war breaks out and authoritarians begin to seize assets and impose capital controls on their citizens. Wait until big banks and tech companies start censoring opponents for their political views. Then You will understand why we need a stateless, decentralized, anonymous digital currency."

Bitcoin Gold

Bitcoin has been seen by many of its libertarian-leaning advocates as a kind of “doomsday insurance,” a “digital gold” that will provide a source of stability as the world becomes more chaotic and unpredictable.

 Inflation in the United States is rising at its fastest pace in a decade, and the VIX, Wall Street's so-called fear index used to measure expected stock market volatility, has risen more than 80 percent this year. Last month, the Canadian government decided to freeze the bank accounts of a protest convoy of anti-vaccine truckers. The Russian invasion of Ukraine resulted in the collapse of the ruble and brutal sanctions that devastated the Russian economy, with many US companies withdrawing from Russia, making it virtually impossible for their citizens to access their bank accounts and use their credit cards.

In other words, the current macro environment can be seen as a perfect mix of economic and geopolitical events, which in theory should be great for Bitcoin.

Ukraine Russian Bitcoin

But Bitcoin did not explode. Even as Wall Street analysts ponder the possibility of nuclear war, crypto prices have fallen steadily. The price of Bitcoin fell 10 percent last month, while Ethereum, the second most popular cryptocurrency, fell by about 15 percent.

The daily use of cryptocurrencies is also not progressing as you might expect. Bitcoin's trading volume rose after Russia invaded Ukraine, but has remained relatively stable since then, suggesting that people are in no rush to exchange their cryptocurrencies for the ruble and hryvnia (Ukraine's currency). Russian oligarchs also don't seem to be using crypto to escape sanctions en masse, despite their initial fears.

It should also be admitted that cryptocurrencies have some usage areas in this chaos environment. In Canada, for example, some truckers have raised donations with crypto. Similarly, the Ukrainian government has reportedly raised around $100 million through crypto donations. And it is too early to say that crypto will not be useful in the later stages of the Russian conflict.

But Bitcoin doesn't seem to be playing a central role in the global unraveling so far, raising the obvious question: Why?

Washington BTC

One possible answer to this question is that cryptocurrencies are still very confusing and difficult for normal people to use, especially during a war. Internet access is problematic in many parts of Ukraine, and even the country's elite are struggling to convert their assets into crypto, according to reports.

Another possibility, popular with those who are skeptical of Bitcoin and other cryptocurrencies, is that Bitcoin is too volatile to be useful as a hedge against economic and political instability.

Of course, there are other explanations as well. Sam Bankman-Fried, CEO of crypto exchange FTX, said on Twitter that while he thinks Bitcoin will perform better in an uncertain political and economic environment, the reason why it doesn't do so is partly due to negative media coverage of crypto.

But perhaps the most interesting insight into crypto's usefulness in unstable times comes directly from the Ukrainian government. Ukraine has announced that it has started buying military equipment with donations made in crypto.

Ukraine's Deputy Minister of Digital Transformation, Alex Bornyakov, said that one advantage of using crypto when collecting donations is how quickly funds can be distributed.

   “In such an environment where banks are not fully functioning, being able to make fast transfers with crypto helps to get results almost instantly.”