Ukrainian exchange records sharp increase in transactions
According to data from CoinGecko, the trading volume recorded on kuna, a Ukrainian cryptocurrency exchange, surged after the first Russian strikes in Ukraine. This Thursday, February 24, 2022, the platform’s trading volume briefly rose above $4.8 million.
Evolution of trading volume on Kuna during the week of the Russian invasion
In the days before the Russian invasion, between February 20 and 23, the trading volume fluctuated between $775,000 and $2.4 million. Kuna didn’t have experienced such trading volume since May 2021, when the price of Bitcoin (BTC), and most altcoins, suffered a severe correction. On the morning of Friday, February 25, the volume contracted around $2 million.
The Ukrainian population has always been very attracted to cryptocurrencies. According to a study by Chainalysis, Ukraine is the 5th country where crypto-assets are the most used. This phenomenon can be explained in particular by the low level of banking among Ukrainians, especially in the most rural regions.
Recognizing the interest of Ukrainians in the sector, the government recently passed a law aimed at provide legal status to cryptocurrencies. This legislation, very different from El Salvador’s Bitcoin law, sets up a clear regulatory framework around crypto-assets in order to promote the emergence of specialized companies in the country.
? Find our guide – How to buy Bitcoin (BTC)?
A reaction to banking restrictions and the fall of the national currency
This sudden increase occurs after restrictions of the Central Bank of Ukraine. In order to stem a possible flight of capital, the organization drastically limited bank withdrawals and prohibited Forex withdrawals throughout the country. The National Bank of Ukraine assured that these measures were “temporary, but essential” to maintain financial stability. It also froze the official exchange rate of the national currency.
Following the Russian invasion, the hryvnya (UAH), the country’s national currency, had suddenly lost value. The fiat currency crashed as low as $0.033 this Friday, February 25, 2022. In response, Ukrainian investors massively converted fiat currency into cryptocurrency. As CoinGecko shows, Internet users have visibly bought stablecoins to protect their assets.
Price evolution of the USDT/UAH pair during the invasion of Ukraine
On Kuna, Tether’s USDT price incidentally rose briefly beyond 36 hoursryvnias before stabilizing around 33 hryvnias. The price of the pair remains much higher than its usual level.
A few days before the conflict, USDT was still trading around 28 hryvnias. The USDT conversion rate was even higher than that of the US dollar with the hryvnia, which did not exceed 30 units.
In parallel, Ukrainian army support organizations have received numerous cryptocurrency donations since the attack. Through NGOs, the Ukrainian army received the equivalent of $400,000 in digital currencies within 24 hours, a report by Elliptic recently reported. Organizations like Come Back Alive managed to raise large sums through crowdfunding campaigns.
Related: Russia Threatens To Seize Russians’ Savings If Overseas Funds Are Frozen
Sources: CoinGecko, Kuna
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About the Author : Florian Bayard
