Interest in hardware wallets that allow cold storage of cryptocurrencies has declined among Russian users after surging this year following the Ukraine invasion. Sales of these devices have nearly halved, according to a report citing a major marketplace.
Russians’ demand for cold storage wallets cools after this spring’s spike
Retailers selling hardware cryptocurrency wallets in Russia are now overstocked, a market source told Kommersant, a leading Russian business daily. This is due to explosive demand for these products after Moscow’s decision to intervene militarily in neighboring Ukraine earlier this year.
In the spring months, many Russians tried to acquire cold storage devices for their crypto assets as sanctions related to the Ukrainian conflict and currency restrictions imposed by the Bank of Russia grew. Some Russian citizens relocating to other countries also took their savings with them in crypto.
According to statistics compiled by Moneyplace Analysis Services, sales of hardware wallets in the Ozone and Wildberry marketplaces reached a record high of 16.5 million rubles (over $275,000) in May; in August, they dropped by half to 8 million rubles (130,000 (less than $5,000).
A spokesperson for Ozone, dubbed the “Amazon of Russia,” said sales in the first half of 2022 were up more than fivefold from the same period last year. e-commerce platform M.Video-Eldorado added that sales peaked in March. Online tech store City Link launched a hardware wallet developed by. Tangemlaunched at the end of June, with sales peaking in July.
Roman Nekrasov, founder of the ENCRY Foundation, which represents IT companies offering services in the field of blockchain and technological innovation, commented that the decline was due to the Russian Central Bank easing restrictions on cross-border currency transfers Nekrasov said the decrease was due to the Russian Central Bank relaxing restrictions on cross-border currency transfers. The expert also remarked that “those who want to move their assets abroad, in most cases, have already done so.”
Sales volumes were also affected by a decrease in the cost of crypto wallets, both on the back of lower demand and a stronger US dollar. Moneyplace estimates that the average price of SafePal products tripled between April and September, with Leisure and Tresor recording a twofold drop, and the price of Tangem falling by a quarter. This trend was also confirmed by Wildberry.
Since cryptocurrencies are not yet comprehensively regulated, the use of crypto wallets is not restricted in any way by current Russian law, the report noted, citing Pavel Ganin, a partner at the law firm A.t.legal. head of investments at the ICB Fund. Aaron Chomsky, head of investments at ICB Fund, believes that future improvements in the crypto market should lead to a rebound in demand for hardware wallets.
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