Demand for hardware wallets that allow cold storage of cryptocurrencies is waning after a surge this year following the Ukraine invasion. Citing major markets, sales of these devices have halved.
Russian demand for cold storage wallets will cool after rising this spring
Retailers selling hardware cryptocurrency wallets in Russia are now overstocked, market participants told Russian business daily Kommersant. These products saw explosive demand earlier this year after Moscow decided to intervene militarily in neighboring Ukraine.
In the spring, many Russians sought a cold storage device for their crypto assets amid expanding sanctions over the conflict in Ukraine and monetary restrictions imposed by the Bank of Russia. Some Russian citizens moving to other countries also took their savings in crypto.
According to data compiled by the Moneyplace Analytics service, sales of hardware wallets on the Ozone and Wildberry marketplaces reached a record high of 16.5 million rubles (over $275,000) in May. In August, the figure fell by half, down to 8 million rubles (less than $135,000).
A spokesman for Ozone, the so-called “Amazon of Russia”, said that the number of goods sold in the first half of 2022 increased more than five times compared to the same period last year. At the peak of sales in March, the e-commerce platform M.Video-Eldorado was added. Online tech store Citilink released a hardware bag made by Tangem in late June and sales peaked in July.
Roman Nekrasov, founder of the Ensiri Foundation, which represents IT companies providing services in the field of blockchain and technological innovations, opined that the decline was due to the reduction of cross-border money transfers by the Central Bank of Russia. In addition, the expert said, “those who want to transfer assets abroad, probably, have already done so.”
Against the backdrop of reduced demand and the US dollar, sales volumes were affected by the decline in the value of crypto wallets. According to Moneyplace estimates, the average price of Safepal products tripled between April and September, Ledger and Trezor recorded two-fold drops, and Tangem prices fell by a quarter. The trend is confirmed by Wildberries.
The report cites Pavel Ganin, a partner at the Atlegal law firm, as cryptocurrencies are not fully regulated, so the use of crypto wallets is not restricted in any way by current Russian legislation. Aaron Chomsky, head of the investment department at ICB Fund, believes that the recovery of demand for hardware wallets can be expected with the future improvement of the crypto markets.
Do you agree that the sale of cold storage equipment will increase again in Russia if the crypto markets improve? Share your expectations in the comments section below.
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