Ukrainian Bitcoin Volume Soars 200% as Russia War Raises Currency Concerns

Kuna, a long-running local cryptocurrency exchange, has seen rapid changes in customer activity amid currency controls and historically low levels of the hryvnia (Ukrainian currency unit).

Bitcoin (BTC) and altcoin trading volumes surged on a major Ukrainian cryptocurrency exchange following the Russian invasion, data shows.

On February 24, Kuna’s trading volume nearly tripled to more than $4 million, according to monitoring resource CoinGecko.

Ukrainians are starting to pay attention to cryptocurrencies

As the armed conflict with Russia began, the impact on the fiat currencies of both countries was immediately apparent.

While the Russian ruble suffered significantly more losses, the Ukrainian hryvnia (Ukrainian currency unit) also fell, hitting a record low of 30 hryvnia to the dollar.

Just this month, Ukraine finally approved a law legalizing cryptocurrencies after repeated back and forth among lawmakers, and unsurprisingly, interest in the alternative has grown rapidly.

The impact was evident on the seven-year-old Kuna, which traded less than $1 million on Feb. 21, but approached $4.1 million three days later. According to CoinGecko, the frenzy has started to fade after the initial boom, in line with fiat currencies stabilizing against the U.S. dollar and other major currencies.

Less clear is Kuna's own rate, which shows a strange spread in bitcoin's spot price. At the time of writing, BTC/USD is trading at $38,300 on Bitstamp, while Kuna’s BTC is over $40,000.

Ukrainian Bitcoin Volume Soars 200% as Russia War Raises Currency Concerns

Crypto trading volume between Kuna and popular trading pairs (screenshot) Source: CoinGecko

Central banks tighten monetary freedom

Meanwhile, another reason to enter the Bitcoin market comes from the government’s currency controls this week.

On Wednesday, the National Bank of Ukraine began restricting cash, limiting hryvnia withdrawals to 100,000 UAH ($3,353) per day and banning cross-border foreign exchange purchases and withdrawals outright.

A Facebook post confirmed that the bank also seeks to establish a stable hryvnia.

Meanwhile, Russia’s central bank began intervening in foreign exchange markets on Thursday to shore up its plunging ruble, with what appeared to be several interventions in the past 24 hours.