Russia Estimates Its Crypto Market At Over $200 Billion

Russia’s crypto market got an estimation of over 16.5 trillion rubles ($214 billion), according to Anatoly Aksakov, head of the lower house of parliament’s financial markets committee. It turns out more than 17 million Russians, or about 12% of the total population, are cryptocurrency owners.

Furthermore, sixty percent of Russia’s crypto investors are aged between 25 and 44, while more than 500,000 local computer programmers work in the industry, according to the people involved in the discussions.

The data was calculated last month by analyzing the IP addresses of the biggest crypto-exchange users. However, the estimate might be off by a large margin, due to the decentralized nature of the investments. Furthermore, some traders conceal their activities using virtual private networks to avoid governmental infringement.

Meanwhile, Stanislav Koritsky, host of the investBRO podcast, noted that “the Russian crypto scene is growing and there are more and more investors coming in,” adding that “many of them are young people who don’t understand the market and jumped in amid all the hype.”

The statistical data insights come amid central banks calling for a sweeping ban on the local industry, while the government pursues a softer approach. Bank of Russia’s main concern is the environmental footprint of Bitcoin mining and because it creates incentives to bypass regulations, and finance illicit activities.

The Bank of Russia insists on a widespread crypto ban in Russia, but the local government in the face of Russian President Vladimir Putin called for regulating, rather than banning cryptos, as Russia is currently the world’s third-biggest Bitcoin mining country. Currently, Russia has many regions with a surplus of electricity, including Irkutsk, Krasnoyarsk, and Karelia.

“We have certain competitive advantages here, especially in the so-called mining,” Putin said during a government meeting, while also acknowledging risks associated with crypto.

“I mean the surplus of electricity and well-trained personnel available in the country,” Putin added.

Putin’s position is good news for the mining industry, which suffered from numerous setbacks recently. China’s complete ban last year forced many miners to seek alternative mining destinations, while Kazakhstan temporarily unplugged miners at the end of January 2022, due to the several blackouts, caused by electricity deficits. Russia slowly climbed to be the world’s third-biggest Bitcoin miner in 2021, after the U.S. and Kazakhstan, according to Cambridge University data released in October 2021.

The surplus of electrical power, combined with China’s ban on mining, puts Kremlin in a position to push out regulations, including limiting trading to Russian banks, simplifying the process of blocking foreign crypto-exchange sites, and giving non-residents access to legitimate local exchanges.

Also, Russia’s security services switched their stance on regulations after pushing the central bank for a total ban of cryptocurrencies on the grounds that they could be used to fund opposition parties. Now, they have begun to support the regulatory approach proposed by the government.

Meanwhile, Bitcoin computing power, or hashrate, is slowly ramping up after the Chinese exodus. Since the start of 2022, Bitcoin’s hash rate travelled from around EH/s to a high of 233 EH/s, with a current value of just below 200 EH/s.