Bitcoin trading volumes against the Russian ruble reportedly soared to the highest level in almost a year. At the same time, those employing Ukraine’s hryvnia reached October 2021 heights.
The Result of the Embargoes?
NATO and the EU are still standing away from a direct military conflict and vowed not to send troops to Ukraine. However, they imposed severe monetary sanctions on Russia, aiming to destabilize it and cut its financial connection with the Western world.
The embargoes slammed Russia’s economy and, especially, the country’s national currency. The ruble lost around 25% of its value in a matter of 24 hours.
Contrary to the fiat currency, the cryptocurrency market data provider – Kaiko – revealed that bitcoin is gaining traction in the region after the sanctions. BTC trading volumes against the ruble reached the highest level since May 2021, while those using the Ukrainian hryvnia topped the October peak. Speaking on the matter was Clara Medalie – Head of Kaiko research:
“The trend follows a wave of sanctions against Russia, which has disrupted forex markets and caused the ruble to sink to records law against the dollar.”
Medalie noted that bitcoin’s overall trading volume also soared during the last seven days. She added that the increased activity for BTC/UAH and BTC/RUB trading pairs was “magnitudes greater” than the BTC/USD one.
Experts believe that the financial uncertainty in the region will cause Russians to potentially convert their money into digital assets. On that note, Ukraine’s Vice PM urged crypto exchanges to freeze addresses of Russian-based users.
Some leading trading venues have already announced they will not follow such requests. Kraken’s CEO Jesse Powell emphasized that bitcoin is the representation of libertarian values, and thus his company cannot block customers’ accounts without a legal requirement. He also assumed that many Russian-based users are likely to be against the war.
At the same time, Binance said, “crypto is meant to provide greater financial freedom,” and such an initiative could oppose the concept of the asset class.
BTC Is Attractive in Turkey, Too
Speaking of countries that are passing through financial turmoil, it is worth mentioning Turkey. Last year, the Turkish lira collapsed to record lows, which caused many locals to seek other monetary tools to preserve their savings. As such, they turned to crypto.
A research from the end of 2021 disclosed that Bitcoin (BTC) and Tether (USDT) were the most popular trades against the lira for the past three years. The study further estimated that more than 16% of the world’s crypto users came from Turkey (occupying the fourth position for the most traders globally).