Crypto Weekly: Tumbling together

Russian crypto volume tumbles

For the past weeks, there has been speculation that crypto would be a means for Russia to evade Western sanctions. As we see it, it is unlikely that Russia can seriously evade sanctions using cryptocurrencies due to several reasons namely that carrying out the sanctioned activity with crypto as the medium of exchange instead of fiat does not suddenly make the activity legal. Nevertheless, if one is utilizing cryptocurrencies to bypass sanctions, it should be quite easy to identify and stop it due to the public nature of cryptocurrencies. One more reason is that the Russian crypto market is somewhat illiquid, making it challenging to bypass sanctions to a large degree.

What originally fueled the speculation of the evasion of sanctions using crypto was increased crypto trading against the ruble following the new sanctions in late February. On the 24^th of February, Russian volume peaked with crypto worth $70.7mn traded against the ruble. In the first place, this is not much considering the size of Russia. On Thursday last week, the volume was reduced by half with $34.1mn traded against the ruble on that day. In our opinion, this indicates an illiquid market not presently able to facilitate notable evasion of sanctions, no matter whether we are talking $70.7mn or $34.1mn in volume a day.

NFT prices and volume plunges

The crypto trend of 2021 namely non-fungible tokens (NFTs) extended well into January beating the prior all-time high-volume set in August 2021 on the largest NFT marketplace OpenSea with a January volume of $5bn. However, some fatigue started to spread in the NFT market in February, as almost $1.5bn was cut off OpenSea’s monthly volume. When February became March, it seems the February sentiment was likewise carried over to March. The OpenSea volume has solely been slightly more than $400mn month to date, on average around $70mn a day, from an average of $127mn in February. Simultaneously, the floor price has tumbled in Ether across the most popular NFT series such as Bored Ape Yacht Club. With Ether tumbling in USD in March as well, the fatigue in the NFT market has been intensified, indicating that the NFT market is not insensible to global uncertainties on this scale.