Interest in hardware wallets that allow cold storage of cryptocurrencies is waning among Russian users after this year’s wave that followed the invasion of Ukraine. Sales volumes for these devices have almost halved, according to a report citing leading marketplaces.
Russian demand for cold storage wallets cools after spike this spring
Retailers selling cryptocurrency hardware wallets in Russia are now overcrowded, market participants have told leading Russian business newspaper Kommersant. It comes after these products saw explosive demand earlier this year following Moscow’s decision to intervene militarily in neighboring Ukraine.
In the spring months, many Russians sought to acquire a cold storage unit for their crypto assets, amid expanded sanctions over the Ukraine conflict and currency restrictions imposed by the Bank of Russia. Some Russian citizens who moved to other countries also took their crypto savings with them.
According to statistics compiled by the Moneyplace analytics service, hardware wallet sales on the Ozon and Wildberries marketplaces reached a record 16.5 million rubles in May (over $275,000). In August, the figure fell by half, falling below 8 million rubles (less than $135,000).
A spokesperson for Ozon, known as the “Amazon of Russia”, said the number of units sold increased more than five times 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 retailer Citilink launched a hardware wallet developed by Tangem at the end of June, and sales peaked in July.
Roman Nekrasov, founder of the ENCRY Foundation, which represents IT companies providing services in the field of blockchain and technology innovations, commented that the decline has come about because the Central Bank of Russia has eased restrictions on cross-border currency transfers. In addition, “those who wanted to transfer assets abroad have most likely already done so,” the expert noted.
Sales volumes were also affected by the falling prices of crypto wallets, on the back of both reduced demand and the strengthening of the US dollar. According to the estimates of Moneyplace, 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 not limited in any way by current Russian law since cryptocurrencies are not yet fully regulated, the report notes, citing Pavel Ganin, partner at the Atlegal law firm. Aaron Chomsky, head of the investment department of the ICB Fund, believes that an improvement in the demand for hardware wallets can be expected with a future improvement of the crypto markets.
Do you agree that sales of cold storage units will increase again in Russia if the crypto markets improve? Share your expectations in the comments section below.
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