If India's COVID-19 relief fund is similarly impactful to GiveWell's Maximum Impact Fund, it can use $2 million to give people thousands of total years of healthy life (or "save" hundreds of lives).
It's hard to imagine that the risk of losses to crypto investors has much ethical importance relative to those years — everyone who buys or sells ETH should understand that they are willingly taking on risk.
As for electricity: Via this calculator, it seems like $2 million in ETH requires roughly 60,000 kWh of electricity to mine. (The transfer takes roughly 100 additional kWh.) For comparison, a single intercontinental flight requires ~12,000 kWh per person.
If Vitalik Buterin had access to lifesaving medicine for hundreds of people, but he had to fly across the globe with four other people to deliver it, to what extent would it be unethical for him to do so?
The situation is more complicated than that — most instances of crypto use, especially high-profile ones, presumably make it more likely that others will use crypto —but I don't think it's so much more complicated that it becomes unethical for the relief fund to accept the money.
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$2 million is an unusually large crypto donation. Might it be unethical to accept donations below a certain size, since the transfer cost is constant?
I'd leave it up to the charity in question to determine how much good they can do with a given donation, and how to weigh that against the environmental cost. A blanket answer of "no, it's always unethical" seems very unlikely to be right.
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That's without getting into the question of what counts as an "ethical" source of money. Many people would argue that Bill Gates's donations are unethical because of his business practices, or that anyone who earns-to-give as an investment banker is doing something unethical. But because of those donors, millions of people are alive who otherwise would have died; ethical tradeoffs are part of life, and these seem like good trades to make.
Yes, these are extremely energy efficient ways of saving lives. I think most people would think it is ethical to save lives from radon gas causing cancer, despite the solution being more ventilation. If it costs $5 million to save a life (typical value in the US), since electricity costs about $0.10 a kilowatt hour, then we would be willing to spend 50 million kWh to save a life! In reality, not all of the cost goes to energy, but a lot of the cost would be saved in the form of heating fuel, which is much less than $0.10 a kilowatt hour. This can be used to show that the energy used to fly flowers grown in Africa to Europe is also a relatively energy efficient way of saving lives.
I know there were articles/calculations that claim this, but I still am a bit skeptical if it really is similarly impactful. I wish GiveWell would make a blog post to comment on this, and do their own shallow analysis. If it gets to the end of the year, or even to the end of June, and they don't make a comment about whether donations for COVID-19 relief in India (i.e. providing oxygen) were as impactful as donating to some of their top charities, that would be disappointing.
I might email GiveWell soon to ask them if they plan on making a blog post about it!