Currency restrictions loosen, hardware cryptocurrency wallet sales fall in Russia.
Russian users' interest in hardware wallets that provide cold storage of cryptocurrency is waning following this year's boom that followed the invasion of Ukraine.
According to a research citing major markets, the sales volumes for these devices have practically been cut in half.
After a Springtime Rise, Russians' Demand for Cold Storage Wallets Declines
According to market participants who spoke with the top Russian business newspaper Kommersant, retailers in Russia who offer hardware bitcoin wallets are currently overstocked. This is because earlier this year, when Moscow decided to intervene militarily in the neighbouring Ukraine, demand for these products skyrocketed.
Due to the growing number of sanctions related to the Ukraine crisis and the Bank of Russia's currency restrictions, many Russians looked to buy a cold storage device in the spring. Some Russians who moved abroad also brought their cryptocurrency savings with them.
Moneyplace Analytics' statistics show that hardware wallet sales on the Ozon and Wildberries marketplaces hit a record high of 16.5 million rubles (more than $275,000) in May. The amount decreased by 50% in August, falling below 8 million rubles (less than $135,000).
The number of items sold grew more than five times in the first half of 2022 compared to the same period last year, according to a spokeswoman for Ozon, dubbed "the Amazon of Russia." According to the online store M.Video-Eldorado, sales peaked in March. A hardware wallet created by Tangem was introduced by Citilink, an online tech retailer, at the end of June, and sales peaked in July.
According to Roman Nekrasov, the founder of the ENCRY Foundation, which represents IT firms offering services in the blockchain and tech industries, the reduction has resulted from the Central Bank of Russia relaxing its limits on international money transfers. Additionally, the expert noted that "those who wished to shift assets abroad, most certainly have already done so."
In light of the declining price of cryptocurrency wallets and the strengthening U.S. dollar, as well as the decreased demand, sale volumes were also impacted. Moneyplace believes that between April and September, the average price of Safepal products decreased by three times, that of Ledger and Trezor by two times, and that of Tangem by a fourth. Wildberries confirmed the pattern.
Since cryptocurrencies have not yet been thoroughly regulated, the use of crypto wallets is not banned in any manner by current Russian law, the report states, citing Pavel Ganin, a partner at the law company A.t.legal. Aaron Chomsky, head of the investment division at ICB Fund, predicts that as the cryptocurrency markets develop in the future, there will be a rebound in demand for hardware wallets.
