In a recent turn of events, many Russians have found solace in the world of cryptocurrencies as their nation experienced a tumultuous uprising by the Wagner mercenary group. Market data has revealed a surge in trading volume of Tether, the U.S. dollar-pegged stablecoin, denominated in rubles during this brief period of rebellion.
During the Wagner revolt, which unfolded over the weekend, Russians displayed a clear inclination towards seeking refuge in cryptocurrencies, particularly Tether (USDT), as the nation stood on the brink of potential civil war. According to blockchain data firm Ccdata, trading between the Russian fiat and Tether saw a significant spike, reaching a value close to $15 million or approximately 1.3 billion rubles.
This surge in volume was a notable increase from the previous day, with trading reaching only $4 million. The Wall Street Journal highlighted this substantial growth, emphasizing the impact of the Wagner revolt on the trading activities involving Tether. Simultaneously, Yevgeny Prigozhin, the leader of the Wagner group, released a series of video and audio messages, declaring a "march for justice" against Russia's military leadership. This marked the culmination of a longstanding feud between Prigozhin's mercenaries and the Moscow generals over the war in Ukraine.
The market data for June 24 was gathered from cryptocurrency exchanges that still facilitate trading pairs with the Russian currency, despite the Western sanctions imposed in response to Russia's invasion. Prominent platforms including Binance, Hitbtc, Cryptonex, and Coinsbit were among those facilitating the trades, as reported by Bloomberg and Ccdata.
Jamie Sly, Head of Communications at Ccdata, clarified that the increase in trading volume doesn't necessarily indicate that users were exclusively purchasing Tether. Instead, it could be attributed to market participants seeking a less volatile asset like USDT compared to the ruble. Sly further pointed out that this trend was not observed in Bitcoin volumes.
Ccdata's findings were corroborated by Clara Medalie, the Director of Research at the blockchain data firm Kaiko. She emphasized that the ruble-denominated Tether trading volume is currently at its highest level since December 2022.
The inclination of citizens to turn to cryptocurrencies during times of political and economic turmoil is not a novel phenomenon. Previous reports have shown a similar pattern in Turkey, where the demand for Tether surged due to record inflation of the Turkish lira. Moreover, following Russia's invasion of Ukraine in late February the previous year, major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), alongside Tether, traded at premiums against the Ukrainian hryvnia, following the imposition of cash withdrawal restrictions by the country's central bank.
Amid the Wagner revolt, Tether's USDT emerged as a prominent choice for individuals seeking alternative assets in the face of heightened political-economic uncertainty. The recent sanctions imposed on Russia have further elevated Tether's appeal, providing an accessible avenue for those concerned about their safety and financial stability.
The influence of economics and global politics on the financial landscape is undeniable. The impact of recent events in Russia serves as a testament to the correlation between political factors and the performance of fiat and cryptocurrencies. The Russian Ruble and USDT currency pair, in particular, have been subject to fluctuations amidst the ongoing geopolitical tensions.
An analysis conducted by Kaiko delved into the volumes of the Russian Ruble and Tether USDT during significant events involving Russia. The study took into account a noteworthy surge in trading volume observed in the aftermath of the Wagner revolt.
The rebellion by the Wagner Group, a private military organization based in Russia, has once again thrust the nation into the international spotlight, sparking concerns among its citizens. Under such circumstances, individuals tend to prioritize their safety and financial well-being, leading them to explore alternative avenues such as cryptocurrencies.
