A wind of change is blowing through the Russian cryptocurrency market. Following Binance’s release in early 2024, a digital exodus has occurred, with users scrambling to find new platforms to host their digital assets.
This shift in allegiance, however, presented an unexpected opportunity for local actors, triggering a land grab for dominance in the world’s largest country by area.
Crypto Market Heats Up Despite Binance Cooling
The Bank of Russia latest report paints a fascinating picture. As Binance’s grip on the market has loosened significantly – its share of web traffic fell from 47% to just 16% in just a quarter – overall crypto activity has surged.
Web Traffic across all major crypto platforms, including exchanges, peer-to-peer platforms and over-the-counter services, increased by 16.4% compared to the previous six months. This recovery coincides with a period of rising valuations in the crypto market, suggesting a growing appetite for digital assets among Russian users.
Binance’s withdrawal has left a gaping void, and many local suitors are stepping up to fill it. The report identifies a collective of five anonymous exchanges that saw their share of web traffic increase from 39% to 64% during the same period. This meteoric rise suggests that these local platforms are effectively capturing the wave of users moving away from Binance.
Crypto Engagement on the Rise
Crypto market churn isn’t just about traffic, it’s also about user engagement. The Bank of Russia reports a significant increase in the average monthly number of unique users (identified by IP addresses) on these platforms. This growth is accompanied by an increase in the proportion of Russian internet visits directed to crypto sites, indicating growing interest in the digital asset space.
The data doesn’t stop there. The report highlights a substantial increase in inflows and outflows of major cryptocurrencies like Bitcoin, Ethereum, Tether and USD Coin by Russian users.
This activity translates into a staggering 4.5 trillion rubles (around $51 billion), a jump of 15.6% from the previous half-year. These figures underline the important role that cryptocurrencies play in the Russian financial landscape.
The Shadow of Carpet Pulls: Safety Issues Take High Place
While the market is booming, a dark cloud hangs over us: the specter of rug pulling. The recent scandal surrounding Béribita Russian stock exchange allegedly linked to a Ukrainian oligarch is a stark reminder of the security risks associated with certain platforms.
The alleged demise of Beribit, with $4 million in user funds, has understandably shaken trust and intensified demand for reliable alternatives.
Binance’s departure has undoubtedly reshaped the Russian crypto market. With the emergence of new players, increasing user activity and security issues requiring attention, the coming months will be crucial in determining the future of this dynamic digital landscape.
Featured image from Unsplash, chart from TradingView
