Interest in hardware wallets allowing cold storage of cryptocurrencies is waning among Russian users after this year’s surge that followed the invasion of Ukraine. Sales volumes for these devices have nearly halved, according to a report citing major trade fairs.
Russians’ Demand for Cold Wallets Cools After Spike This Spring
Retailers selling hardware cryptocurrency wallets in Russia are now oversupplied, market participants told the leading Russian business daily Kommersant. That’s after this year these products saw explosive demand following Moscow’s decision to intervene militarily in neighboring Ukraine.
In the spring months, many Russians sought to acquire a cold storage device for their crypto assets, amid expanding sanctions over the Ukraine conflict and currency restrictions imposed by the Bank of Russia. Some Russian citizens moving to other countries also took their crypto savings with them.
According to statistics compiled by the Moneyplace analytical service, hardware wallet sales on the Ozon and Wildberries marketplaces reached a record high of 16.5 million rubles in May (more than $275,000). In August, the figure dropped by half, falling below 8 million rubles (less than $135,000).
A spokesman for Ozono, 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 tech store Citilink has launched a hardware wallet developed by Tangem at the end of June and its sales peaked in July.
Roman Nekrasov, founder of ENCRY Foundation, which represents IT companies providing services in the field of blockchain and technological innovations, commented that the decline came due to the decline of the Central Bank of Russia to restrictions on cross-border money transfers. In addition, “those who wanted to transfer assets abroad, most likely, have already done so”, noted the expert.
Sales volumes were also affected by the declining cost of crypto wallets, against the backdrop of both reduced demand and the appreciating US dollar. According to the estimates of Moneyplace, the average price of Safepal products fell three times between April and September, Ledger and Trezor registered a double drop, while the price of Tangem lost a quarter. The trend was confirmed by Wildberries.
The use of cryptocurrency wallets is in no way restricted by current Russian law, as cryptocurrencies are still fully regulated, the report notes, citing Pavel Ganin, a partner at the 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 of crypto markets.
Do you agree that sales of cold appliances will increase again in Russia if crypto markets improve? Share your expectations in the comments section below.
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