The ongoing conflict in Ukraine is a “litmus test” for cryptocurrencies, according to Spanish economist Juan Ramón Rallo.
What Happened: Ramón Rallo, in an exclusive interview with Benzinga España, said that cryptocurrencies will have to “demonstrate the extent to which they can provide real utility to citizens most directly affected by the war — both Ukrainian and Russian — when it comes to protecting their assets.”
The test for digital assets doesn’t end at just proving their utility. Cryptocurrencies will also have to demonstrate to investors that “they are capable of maintaining their market value during times of high uncertainty.”
See Also: How To Buy Bitcoin (BTC)
Why It Matters: Failure by cryptocurrencies to prove their worth would result in a “severe setback.”
“If they fail to achieve neither one nor the other, of course it will be a severe setback for the credibility of those cryptocurrencies that don’t achieve it,” the economist told Benzinga's Laura Garcia Saez.
If cryptocurrencies clear the litmus test, their status as a new investment asset class will be enhanced, according to Ramón Rallo.
Russia’s President Vladimir Putin announced a “special military operation” in Ukraine on Feb. 23. Bitcoin (CRYPTO: BTC) has gained 10.05% since the invasion began, while Ethereum (CRYPTO: ETH) has risen 6.83% and Dogecoin (CRYPTO: DOGE) has declined 8.31%.
As of this week, Ukraine has received $100 million in cryptocurrency donations since the war began.
Read Next: Ethereum Co-Founder Says Russia-Ukraine War Has Pushed Crypto Adoption To A Point Of 'No Return'
