Bitcoin jumps 9.3% on demand from Russians and Ukrainians


Bitcoin defied a stock market meltdown on Monday, surging 9.3% amid what analysts said increased demand from Russian and Ukrainian buyers.

The world’s most popular digital currency was trading around $41,200 on Monday afternoon, while Ethereum was up 7.3% at $2,800.

The surge may be partly explained by Russians flocking to escape the rouble, which has fallen due to crippling sanctions from the United States and the European Union, according to First Block Capital’s Marc van der Chijs.

Van der Chijs said he saw bitcoin sell for as much as $46,000 on some Russian exchanges on Monday, around $5,000 premium to its US price.

“There is normally no difference [between the Russian and US price of bitcoin] because there are opportunities for arbitrage,” van der Chijs told the Post. “This seems to indicate that this bitcoin price increase is due to the Russian purchase.”

Russians worried about the stability of their currency and financial system might look to bitcoin as a way to protect their savings, he said.

Russian financial institutions, including state-owned bank Sberbank, have been hit with crippling sanctions.

Conversions between bitcoin and the Russian ruble and Ukrainian hyrvnia hit their highest level in months immediately after Vladimir Putin ordered the invasion last week, according to Data published Monday by Kaiko Research.

“We are seeing evidence of an increase in bitcoin-ruble volume,” chief research officer Garrick Hileman told The Post, warning that it was unclear whether Monday’s price movements could be entirely attributed to these transactions.

“There is definitely a big increase from what was the norm historically,” said Hileman, who is also a visiting scholar at the London School of Economics. “Is it significant enough to move the price to this degree? I can not tell.

Conversions between bitcoin and the Russian ruble and Ukrainian hyrvnia hit their highest level in months.
Rick Bowmer

Hileman added that bitcoin’s surge could also be attributed to people converting fiat into cryptocurrencies in order to donate to the Ukrainian military and Ukrainian charities, which have raised over $22 million in crypto in the past. course of the last five days, according to Data from crypto compliance firm Elliptic.

It could also be due to factors unrelated to the war, such as a short squeeze, he said.

“It’s very difficult to make a clear interpretation here,” he said.

Many major crypto exchanges, including Coinbase and FTX, do not operate in Russia. Therefore, many Russians have turned to Cayman Islands-based Binance, which is the largest crypto exchange in the world and offers exchanges between ruble and bitcoin.

After Ukrainian Deputy Prime Minister Mykhailo Fedorov on Sunday called on crypto exchanges to block Russian users, Binance refused.

“We are not going to unilaterally freeze millions of innocent user accounts,” a Binance spokesperson said. told CNBC. “Crypto is intended to provide greater financial freedom for people around the world. Unilaterally deciding to deny people access to their crypto would defeat the very reason crypto exists.

Crypto exchange Binance refused to block accounts belonging to Russians.

Cryptocurrencies fell along with stocks last week when Russia initially invaded Ukraine, but have since outperformed. Bitcoin is up 10.8% in the past five days, while the Dow Jones Industrial Average is down 1.0%.

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