(Bloomberg) – The narrative of Russians avoiding sanctions via crypto seems false.
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As the world’s largest digital currency rose 12% on Monday, expectations of growing demand from Russia-based investors were cited by some in the industry as the immediate cause.
But recent blockchain data suggests that residents of the sanctions-hit nation were in no rush to trade crypto on major exchanges. Ruble-denominated crypto activity was just $34.1 million on March 3, according to Chainalysis. That’s down significantly from the recent high of $70.7 million on Feb. 24 — and the all-time high of $158 million on May 20, 2021.
“This is a fraction of the volume that was seen during all-time highs in Russian crypto trading volume reached in May 2021,” said Madeleine Kennedy, senior director of communications at Chainalysis.
Citigroup Inc. also estimates that actual Bitcoin purchases in the country averaged just 210 BTC per day over the past week, compared to total daily volume that tends to be between $20 billion and $40 billion. .
While Russians can still trade on a peer-to-peer basis, large volumes should still be visible on the blockchain. This suggests that Bitcoin’s rally over the past week to over $45,000 as Moscow stepped up its invasion of Ukraine has little to do with the country’s purchasing power in the future. practice.
“Russian volumes have been relatively weak so far, suggesting that the price action is more due to investors positioning themselves for an expected uptick in demand from Russia, rather than Russian demand itself. “, according to Citi analysts, including Alexander Saunders in a Wednesday report. “It will take significant capital flight to move the needle.”
Regulated exchanges can still provide services to Russian-based users outside of the ever-growing list of sanctioned entities.
“As if yet, we haven’t seen evidence of large-scale sanctions busting by sanctioned Russian entities,” Kennedy of Chainalysis said. “If they attempt to use cryptography, it would be very difficult for them to do so without being detected on a large scale.”
Bitcoin was down 4.6% in New York on Thursday at $42,065.
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