Investors began to switch to crypto to protect themselves from the conflict in Ukraine

Global investors have begun to transfer money to cryptocurrency funds to protect themselves from the financial consequences of the Russian-Ukrainian conflict. In three weeks, about $4 billion was invested in this area.

Last week invested another $400 million in startups in this sector.

“The conflict in Ukraine has armed our financial and digital economy and has really accelerated blockchain adoption. We are seeing a reallocation of funds into cryptocurrencies and blockchain from real estate and bond funds, including due to higher interest rates,” said Paul Hsu, founder of Decasonic fund, which invests in both digital assets and venture capital, in an interview with the agency.

U.S. investors withdrew $7.8 billion from bond funds between March 2 and 9, according to Refinitiv Lipper. Real estate funds recorded a net outflow of $707 million over the same period, with another $1.15 billion withdrawn between Feb. 23 and March 2, Reuters writes.

During the Ukrainian crisis, crypto has outperformed traditional risky assets such as stocks, Reuters writes. According to him, in February alone, bitcoin rose by 12.2%, and ether by 8.8%. After a sharp decline on February 24, when Russia launched a "special operation" in Ukraine, the two most popular cryptocurrencies rose by 14.5% and 13.5%, respectively, while the S&P 500 rose by only 3.2%.