Amid the Russian invasion of Ukraine, the “real” volume of Bitcoin (BTC) soared to levels not seen since December 4th.
Earlier this week, blockchain analytics firm Arcane Research reported that real daily BTC trading volume surpassed $10 billion last Thursday (Feb 24th, the first day of the invasion). This marks the highest volume recorded in three months.
Additionally, the report cited “new crypto narratives” that have emerged amid the ongoing crisis. Such as cryptocurrency fundraising in Ukraine, as well as an increase in demand for western blocks and Russia implementing “the strictest capital controls in decades.” It is possible that investors looking to mitigate risk also played a role in the surge in daily BTC volume. The price of BTC dropped 10% on Feb 24th, showing strong selling pressure from investors.
The term “real trading volume” refers to data obtained from exchanges regarded as reputable and free from wash trading. For this study, Arcane Research compiled its data from Bitwise 10 exchanges (including Coinbase, Kraken, Poloniex, Binance, LMAX, and FTX). Comparatively, crypto data aggregators such as Coingecko – who pull data from more than 500 exchanges – reported BTC’s trading volume on Feb 24th as around $25 billion. Messari’s real Bitcoin volume chart (which includes many additional exchanges) displays similar data to Arcane’s. Showing a spike of around $11.6 billion worth of volume recorded on Thursday. Adding that as of March, the real daily Bitcoin volume has dipped to around $7.5 billion since then.
Cryptocurrencies in Ukraine and Russia
According to Arcane Research, the price of Bitcoin spiked 14.5% in the space of 24 hours on Feb 28th. Reporting its biggest daily percentage gain in over a year. According to the firm, the rapid rise can be attributed in part to Russian and Ukrainian crypto adoption (although the volume is relatively small in global terms). As well as increased speculation on cryptocurrencies‘ applications during the current Russian invasion.
There have been flow-on effects for the use of cryptocurrencies due to the severe disruption of financial services and markets in both Russia and Ukraine. The report showed a significant surge in crypto purchases from Ukrainian residents that occurred last month. On Feb 24th, around the time the Russian invasion began, Binance’s daily Tether (USDT) stablecoin purchases via the Ukrainian hryvnia (UAH) increased from around $2.5 million to nearly $8.5 million by Feb 25th. BTC/UAH showed a similar trajectory, rising from around $1 million to $3 million within that time period.
Russia also experienced a similar phenomenon, with Ruble-based USDT purchases rising from $15 million on Feb 21st, to $34.94 million on Feb 28th. Daily Bitcoin purchases also rose from a low of roughly $5 million to a high of around $15 million on Feb 25th, before falling down to the $12 million range.