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ETFS 21Shares Crypto Monitor - 6th April 2022


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Market Outlook

The price performance of the markets this month was progressive in comparison to February. The market cap of the whole crypto industry started hovering over $2T shortly before March came to an end. This month also witnessed crypto’s highest correlation with tech stocks, as seen in the chart below. Bearing in mind that the closer it is to 1, the higher the correlation, and that the closer it is to 0, the lower the correlation, the connection between Bitcoin and S&P 500 is still relatively very low. There have been a lot of developments in the Ethereum network, riling up hype in its ecosystem. One of the biggest moves is the long-anticipated proof-of-stake migration, which has shown a visible impact on Ethereum’s price performance, up 15.5% from last month.

BTY-SPY Correlation


Source: CoinMetrics

In this report, we will explore the macro factors driving the markets, on top of which is the war waging between Russia and Ukraine. We will also lay out our propositions on regulatory movements, initiatives as well as technological developments in the crypto industry.

Russo-Ukrainian Conflict


March started with the cancellation of what would have been the world’s first state-run airdrop. The Ukrainian government decided to withdraw from issuing fungible tokens, announcing it would drop some NFTs to support the Ukrainian army.

On March 30, the first sale of Ukraine’s “Museum of War'' was made. The Ukrainian government partnered with, a one-stop shop for NFTs, to build a timeline of collages and images documenting the Russian invasion of Ukraine sold as tokens on the Ethereum blockchain. The government expects to raise at least $2M from its Museum of War, featuring 5,000 to 7,000 NFTs priced at around $450 each.

Moreover, Ukraine’s deputy minister of digital transformation said that crypto is playing a significant role in Ukraine’s defense. Although the amount ($71.8M) of donations made in crypto is just a small fraction in comparison to those made in fiat, Ukrainian authorities highlighted that the speed and ease of use of crypto transactions are what really helped the war-ridden nation.

That being said, the crypto use case in the Ukrainian plight for humanitarian aid appears to be two-fold. The Museum of War aims to preserve the memory of the real events of that time, spread truthful information among the digital community in the world, and collect donations simultaneously. This is not the first example in this history-preserving use case in the crypto industry.

Arweave is a crypto project that now has over 41M files uploaded to document the ongoing crisis. Describing itself as a global, permanent hard drive built on the blockchain, Arweave is a decentralized storage protocol designed to provide scalable and permanent on-chain data storage sustainably. At 21Shares, our thesis has been that the use cases of blockchain technology and Web 3 tools echo louder in the wake of geopolitical conflicts. We have laid out our thesis on Arweave in the fifth issue of our State of Crypto, of which you can get a copy here.

On the same philanthropic note, Uniswap added a new “Donate to Ukraine” feature to encourage ETH donations to the war-ridden country. The feature automatically exchanges any of Uniswap’s listed tokens to ETH for Ukraine.


On March 7, Coinbase announced that it had blocked more than 25,000 wallet addresses linked to Russian individuals or entities who are suspected of having engaged in illicit activity. Similarly, but with users based in another sanctioned state, OpenSea deactivated Iranian-based accounts without prior notice or explanation, on the back of the escalating conversation about sanctions. Moreover, two fundamental pieces of the Ethereum ecosystem, Infura and MetaMask, are restricting access to users in certain geographical areas, shying away from giving any specific details.

At 21Shares, as noted in our State of Crypto magazine, the decentralization of the crypto web development layer will be key to unlocking the full potential of Web3. There are competitors and alternatives to Infura such as Pocket Network attempting to become the TCP/IP of Web3 node infrastructure – a multi-chain relay protocol that incentivizes RPC nodes to provide dApps and their users with unstoppable Web3 access.

On March 11, as the invasion entered its fourth week, news came out that high-net-worth Russians attempted to liquidate billions of dollars of crypto last week through Dubai crypto companies. A week after, Michael Chobanian, founder of KUNA Exchange, told US senators in a hearing about the role crypto-assets play in the pursuit of illicit finance that there are a lot of Russians in and outside Russia who rely heavily on crypto. These Russians represent the opposition to Putin’s regime, who will be negatively affected if legislation is drafted to exclude Russian users altogether, killing the opportunity to have an opposition to bring down this regime. Chobanian denied that the Russian government could evade sanctions using crypto-assets, explaining that it’s virtually impossible to transfer large amounts of money from fiat to crypto-assets.

Back in 2020, our Director of