Russian dormant bitcoin wallets steadily increasing over past 18 months

When it comes to cryptocurrency adoption, Russia has been at the forefront of regulatory discussions, with estimates indicating that the country could benefit greatly from taxing digital currency transactions.

However, recent data suggests that citizens are in no rush to play the market as investors prefer to store crypto rather than speculate with up to 60% of Russian crypto wallets in a “dormant” state, according to Kommersantciting a report from cryptocurrency exchange MEXC.

Market participants attribute this to the notion that cryptocurrencies are long-term investments, although stringent market regulation also plays a role in discouraging investment in digital assets.

The director of the Alfacash cryptocurrency exchange, Nikita Soshnikov, points out that the percentage of “sleeping” Bitcoin wallets has been increasing for the past year and a half and that Russia is among the top five nations in terms of this statistic.

80% of accounts had no movement for 4 months

According to MEXC estimates, more than 80% of Russian accounts have had no activity on them for a period of up to four months or more. While at the same time, 68% of those users logged into their accounts at least three times a year, meaning they didn’t lose their passwords.

Andrei Gusev, Managing Partner of Borenius Russia, said:

“The lack of movement on them indicates that Russians do not see cryptocurrencies as a means of payment, but tend to see them as a way to get rich over a long distance.”

Meanwhile, ENCRY Foundation Founder Roman Nekrasov believes that the strategy centered on long-term cryptocurrency asset accumulation has gained traction globally over the past couple of years.

Nekrasov believes that many Russians are among the so-called early adopters of Bitcoin. The latter became interested in virtual currency during its first five years and had no intention of selling.

The Russian Bill to Regulate Cryptography

It is still up in the air in Russia regarding the regulation of cryptocurrencies. By February 18, the Russian government and the Central Bank of Russia are seeking to create a law governing the circulation of digital currencies in the country after originally slated for February 11.

Additionally, the Ministry of Finance is discussing the subject of a transition period for the taxation of income derived from cryptocurrency transactions.

Finally, many analysts believe that even after the bill is enacted, Russians will be reluctant to disclose their cryptocurrency holdings in order to protect their privacy. As EXANTE Senior Strategist Jānis Kivkulis put it, cryptocurrencies in Russia “will remain an iceberg, nine-tenths of which is hidden in plain sight.”

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