Despite a strong market sentiment that the Russia-Ukraine war has propelled crypto trading in the region, research shows the contrary.
Crypto Not Growing Amidst War
According to a recent research from ‘Crystal Blockchain’, Blockchain Analytics firm, crypto trading in the conflict zone has not propelled. In fact the downwards trend in the on-chain activity has continued.
After Russia invaded Ukraine on February 24, right away people from both the countries began to migrate. While Ukrainians migrated to protect themselves from the inevitable harms of the invasion, Russians fled their country citing economic difficulties they could face due to the sanctions imposed upon Russia.
In the following weeks, Russia got ousted from Swift (Society for Worldwide Interbank Financial Telecommunications), and most of the traditional financial institutions halted their operations in the region.
People’s access to their wealth became difficult on account of which masses belonging to both the countries shifted to crypto, a relatively less decentralized financial ecosystem.
As Russians, particularly, dealt with the sanctions through Crypto, US based crypto exchanges were then also restricted from providing their services to Russia. Binance, CEX.io, and CoinZoom were the first exchanges to stop their operations in Russia.
The Reason Crypto Has not Really Propelled
Despite all of that going on, there is a sentiment in the community that crypto is benefitting from the war, as traditional financial systems failed to fulfill people’s needs . While, during the early days of war, between February 19 and 24, crypto trading did grow by 900% to over $70 million, but since then, the activity has only been declining, with periodic spikes, the firm wrote in a blog post.
So, while it does look plausible that amidst all the financial hazards people are facing in the region, they must be transferring to crypto. But it is not the case, largely because of the sanctions that have even tied the crypto market.