After the surge in interest in hardware wallets that allow cold storage of cryptocurrency, Russian users are now less interested. According to a report, the sales volumes of these devices have nearly halved according to leading marketplaces.
According to market participants, Russian retailers selling hardware cryptocurrency wallets are overstocked. This is because these products were in high demand earlier this year, after Moscow intervened militarily in Ukraine.
A spike in cold wallet sales in spring happened due to Russian sanctions
Many Russians wanted to purchase a cold storage unit for their crypto assets in the spring, amid increasing sanctions on Ukraine and currency restrictions imposed the Bank of Russia. Many Russian citizens who moved to foreign countries took with them their crypto savings.
Stats from the Moneyplace analytics service show that hardware wallet sales on Wildberries and Ozon marketplaces hit a record high at 16.5 million rubles in May, which is more than $275,000 The figure dropped by half to below 8 million rubles in August (less than $135,000).
Ozon, also known as the “Amazon of Russia”, stated that sales increased by more than fivefold in the first half 2022 compared to last year. M.Video-Eldorado, an e-commerce platform, added that sales reached their peak in March. Citilink, an online tech store, launched a hardware wallet by Tangem in June. Its sales hit their highest point in July.
Roman Nekrasov is the founder of ENCRY Foundation. This foundation represents IT companies that provide services in the area of blockchain and technology innovations. The expert also noted that “those who want to transfer assets overseas, most likely have already done so.”
The declining cost of crypto wallets had a negative impact on sales volumes, despite the fact that there was less demand and an appreciation of the U.S. Dollar. Moneyplace estimates that Safepal products’ average prices fell by three times between April and Sept. Ledger and Trezor saw a drop of twofold, while Tangem lost a quarter. Wildberries confirmed the trend.
According to the report, there is no restriction on the use of crypto wallets under Russian law. Cryptocurrencies are still being fully regulated. Pavel Ganin, a partner at A.t.legal, said that the law does not restrict the use of cryptocurrency wallets. Aaron Chomsky, Head of the Investment Department at ICB Fund believes that a rebound in demand for hardware wallets is possible with a future improvement in crypto markets.