- Several Russian cryptocurrency exchanges like Binance Russia, Garantex and EXMO reported a significant increase in user registrations and activity from March to May 2020
- Bitcoin Futures trading also increased during lockdown
- Russia is expected to adopt a crypto bill that will impose tighter restrictions in the use of cryptocurrencies this fall
The lockdown imposed due to the COVID-19 pandemic serves as a catalyst for increased Bitcoin Trading in Russia.
Several Russian cryptocurrency exchanges like Binance Russia, Garantex and EXMO told Russian news site RBC-Crypto there was a significant increase in user registrations and activity from March to May 2020. EXMO, for example, reported an increase of 15-20% activity on the exchange.
Apart from higher user registrations, there is also an increase in Bitcoin Futures trading activity. Bitcoin Futures works the same way as Futures Trading on traditional assets and enables traders to speculate on the future Bitcoin price without owning the BTC itself. Binance Russia said the figures in April and May 2020 are twice the numbers they received in March and five times the numbers they registered in January.
Garantex Exchange Founder Sergey Mendelev, however, explained the increased trading activity in the country is not associated with people who withdrew money from deposits or those who received “payments from the budget”. Russia had announced financial aid to its citizens and banks have been accommodating loans to those affected by the coronavirus pandemic.
“In my opinion, the increase in the number of users is associated with interest from entrepreneurs and those who have sufficient funds for risky investments,” Mendelev clarified further.
According to United Traders analyst Fedor Anashchenkov, self isolation imposed due to the coronavirus pandemic is just one reason for increased trading activity in Russia. Interest in cryptocurrencies in the country has increased, but he argued volumes are almost always correlated with the price fluctuations. It can be remembered that when Bitcoin hit near $20,000 levels in December 2017, interest in the topic was also at an all-time high. The biggest spike in activity happened this March in Russia, which coincided with the market crash experienced by Bitcoin and traditional stock markets around the world.
However, sentiment in cryptocurrencies is still positive because “retail and large investors’ confidence remains uncertain in the traditional instruments markets,” Anashchenkov added. He expects interest in Bitcoin to further grow once the price stabilizes at the $10,000 level.
This June, however, Russia had begun to relax lockdown restrictions and RBC-Crypto reported decreased interest in Bitcoin based on the date from Google trends. EXMO Exchange Director Maria Stankevich attributed it to the waning interest of those who were just partially interested in the topic.
“With the partial relaxation, those who were reading about crypto during the lockdown may have already switched to other types of activity, including walking.” However, she said, trading volumes and trading activity in their exchange are not affected because “only the price and the situation of the market matter in that aspect”.
The fate of cryptocurrency in Russia will be decided this 2020 fall when the country is expected to adopt the crypto bill that will impose tighter restrictions on the use of crypto assets.