Ukraine Crisis Primes Crypto, Cybersecurity for Venture Funding Boost, Experts Say

The war in Ukraine underscores the need for decentralized solutions, according to Hunter Horsley, CEO of Bitwise

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • The intensifying conflict between Russia and Ukraine has highlighted the use case around cybersecurity and Web3, industry experts say
  • Venture capitalists are going to want in on the growing space, analysts say

Increasing concern over the escalating conflict in Ukraine is likely to lead to a renewed push into decentralized finance and Web3 investments, experts say.

While crypto has always faced criticism for its bad actors, according to Jessica Rabe, co-founder of DataTrek Research, digital assets are still a necessary “decentralized way to store and transfer capital.”

“There are too many positive and lucrative opportunities with the blockchain and Web3 that venture capitalists will want to keep trying to capitalize on,” Rabe said.

Venture capital investments into blockchain startups have hit $3.8 billion so far in 2022, on pace to surpass 2021’s total of $17.9 billion, according to Crunchbase data. Crypto startups received $2.1 billion in 2020 and $2.9 billion in 2019.

“We expect VCs to keep putting money to work in the blockchain and Web3 amid the push to a decentralized internet and finance,” Rabe said. “Big Tech companies dominate today’s internet, so Web3 offers the opportunity to develop the next major online platforms and apps to drive engagement and therefore profits.”

The war in Ukraine underscores the need for decentralized solutions, according to Hunter Horsley, CEO of crypto asset manager Bitwise.

“As it pertains to Web3, I think [the conflict] is absolutely galvanizing entrepreneurs to work on building the decentralized, permissionless systems of the future,” Horsley said. “I think you’ll see more projects and likely investments in identity and media and nonprofit fundraising and DAOs, and a renewed conviction in the importance of the existing platforms like Bitcoin, Ethereum and layer-1s and DeFi.”

Cybersecurity in particular is expected to see major growth, Rabe said, “especially with hacks and cyber threats stemming from the Russia and Ukraine conflict shining a light on its importance.”

The three largest cybersecurity-focused ETFs have all increased in assets under management by more than 9% over the past five days. The Global X Cybersecurity ETF is up 11.4%.

“VCs putting more money to work in cybersecurity is positive for investors in public markets, who have taken notable interest in the space since Russia invaded Ukraine,” Rabe said.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Top Committee Democrat Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried”

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens