Interest in hardware wallets that allow cold storage of cryptocurrencies is waning among Russian users after this year’s surge following the invasion of Ukraine. Sales volumes for these devices have almost halved, according to a report citing major markets.
Russian demand for cold storage wallets cools after peaking this spring
Retailers selling cryptocurrency hardware wallets in Russia are now overstocked, market participants told Russia’s leading business daily Kommersant. This is after earlier this year these products saw explosive demand following Moscow’s decision to intervene militarily in neighboring Ukraine.
In the spring, many Russians sought to acquire cold storage for their crypto assets, amid growing sanctions over the Ukraine conflict and currency restrictions imposed by the Bank of Russia. Some Russian citizens moving to other countries also took their savings with them in crypto.
According to statistics compiled by the Moneyplace analytics service, sales of hardware wallets on the Ozon and Wildberries markets hit a record high of 16.5 million rubles in May (more than $275,000). In August, the figure halved to below 8 million rubles (less than $135,000).
A spokesperson for Ozon, dubbed “the Amazon of Russia,” said the number of units sold increased more than fivefold in the first half of 2022, compared to the same period last year. Sales peaked in March, e-commerce platform M.Video-Eldorado added. Online tech store Citilink has launched a hardware wallet developed by Tangem end of June and its sales peaked in July.
Roman Nekrasov, founder of the ENCRY Foundation, which represents IT companies providing services in the field of blockchain and technological innovations, said the decline was due to the Central Bank of Russia. easing of restrictions on cross-border currency transfers. Moreover, “those who wanted to transfer assets overseas have probably already done so,” the expert noted.
Sales volumes were also impacted by the falling cost of crypto wallets, amid both lower demand and the appreciation of the US dollar. According to Moneyplace estimates, the average price of Safepal products fell three times between April and September, Ledger and Trezor recorded a double drop, while Tangem’s price lost a quarter. The trend was confirmed by Wildberries.
The use of crypto wallets is in no way restricted by current Russian law, as cryptocurrencies are not yet fully regulated, the report noted, citing Pavel Ganin, a partner at law firm Atlegal. Aaron Chomsky, head of the investment department at ICB Fund, believes that a recovery in demand for hardware wallets can be expected with future improvement in crypto markets.
Do you agree that sales of cold storage devices will increase again in Russia if the crypto markets improve? Share your expectations in the comments section below.
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