Reputation Spillovers and Trust Dynamics of Cryptocurrencies in Wartime Ukraine: Evidence from Ukrainian SME Entrepreneurs

Abstract

Cryptocurrencies have become increasingly in demand in Ukraine’s wartime economy, yet little is known about how entrepreneurs perceive them in terms of trust, business use, and reputation. This study examines trust dynamics in cryptocurrencies among Ukrainian small-to-medium enterprise (SME) entrepreneurs under wartime conditions, exploring their association with business behavior, investment decisions, and reputational percep tions. The analysis is based on a survey of 561 Ukrainian entrepreneurs. The results show a statistically significant increase in trust in cryptocurrencies during the war. Higher trust is associated with more intensive operational use of cryptocurrencies and greater importance in investment portfolios. Entrepreneurs who associate cryptocurrencies with traditional liquid assets are more likely to assign them a stronger investment role. The use of cryptocurrencies affects both cryptoassets’ reputations and entrepreneurs’ business reputations. Greater engagement with cryptocurrencies is associated with a higher likelihood of view ing their use as a reputational advantage. However, overall assessments remain cautious due to regulatory uncertainty, financial risks, and potential involvement in tax evasion or speculative activities. Different perceived value propositions of cryptocurrencies are also linked to distinct behavioral strategies. Overall, the findings suggest that, in wartime Ukraine, trust in cryptocurrencies is shaped by their practical usefulness during periods of financial disruption and by their implications for entrepreneurs’ reputations.