Wagner Rebellion boosts Ruble-Tether crypto trading amidst currency turmoil

Wagner Rebellion boosts Ruble-Tether crypto trading amidst currency turmoil

The Surge in Tether Trading Volume and its Connection to the Russian Ruble and Wagner Group’s Rebellion

Introduction

The blockchain industry has been witnessing significant developments in recent times, with various factors influencing the trading volumes and values of digital assets. A prime example of this can be seen in the surge in trading volume between the stablecoin Tether (USDT) and the Russian fiat currency, particularly during the period of the Wagner Group’s rebellion in Russia. This article delves into the background of this surge and the reasons behind it, shedding light on the interplay between geopolitical events and the cryptocurrency market.

The Surge in USDT/RUB Trading Volume

Russian private military company Wagner Group’s attempted march towards Moscow in June exposed weaknesses in Russian power structures and President Vladimir Putin’s hold on the country. Amidst this internal turmoil, Russian traders sought safety from the depreciating Russian ruble, leading to a significant surge in trading volume between Tether and the Russian fiat currency.

Data from CCData, as reported by the Financial Times, revealed that the USDT/RUB trading volume spiked to $14.7 million on June 24, the day of Wagner’s insurgency. This represented a 277% rise from the previous day when the trading volume stood at $3.9 million. The volume dropped to below $3 million on June 25, following the order for Wagner forces to return to their bases, avoiding further conflict.

Binance, being the only major international exchange offering Tether trading against the Russian ruble, played a significant role in this surge. The exchange alone accounted for $8.5 million in volume, more than half of the overall trading volume. Additionally, smaller exchanges catering specifically to Russian traders also contributed to the increased trading activity.

USDT/RUB. Volume spike marked with red arrow. Source: TradingView

Russian Fiat Withdrawals and Depreciating Ruble

The surge in Tether trading volumes coincided with Russians withdrawing over $1 billion from local banks. This was driven by the depreciation of the Russian ruble, which has fallen approximately 30% against the US dollar since December. In fact, the ruble hit its lowest level since the start of the war in Ukraine earlier this month, further exacerbating the economic uncertainty faced by Russian traders.

US dollar against Russian rubles in 2023. Source: TradingView

Connection to Previous Events

Interestingly, the surge in Tether trading volumes during the Wagner Group’s rebellion is not an isolated incident. Similar patterns were observed during the first few weeks of the war in Ukraine in late February and early March of 2022. Both Russian and Ukrainian traders flocked to Tether and Bitcoin as a means of protection during the geopolitical crisis.

Conclusion

The surge in trading volume between Tether and the Russian ruble during the recent Wagner Group’s rebellion highlights the dynamic relationship between geopolitical events and the cryptocurrency market. The instability and depreciation of the Russian ruble prompted traders to seek safer alternatives, such as Tether, resulting in a surge in trading volume. This pattern has been observed previously during the war in Ukraine, indicating a recurring trend when faced with economic and political uncertainty.

The blockchain industry continues to demonstrate the significant impact it can have on global financial systems, offering alternatives to traditional fiat currencies in times of instability. As geopolitical events unfold, it is crucial to monitor the response of traders and investors in the cryptocurrency market, as their actions provide valuable insights into the broader financial landscape.

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