Bitcoin Premium Emerges on Ukrainian Markets Amid Economic Crash

Key Insights

• The Russia-Ukraine conflict gave rise to higher demand for Bitcoin and stablecoins.
• Higher demand resulted in BTC trading at a 6% premium versus Ukrainian hryvnia.
• Tether (USDT) premium spiked to a 4-month high as the stablecoin remains volatile still.

As Russia’s invasion of neighbor Ukraine continues to wreak havoc in the two nations, UN reports highlight at least 536 civilian casualties in Ukraine. Apart from the political tensions, the nation’s financial landscape has been significantly impacted; however, crypto assets are turning into Ukrainians’ savior in these trying times.

Bitcoin Traded At a Premium

With the Russian and Ukrainian markets out of control, a large chunk of their population seeks financial reassurance in cryptocurrencies. The effects of this turmoil could be seen in the sky-rocketing premiums for users wishing to exchange RUB into Bitcoin (BTC) through exchanges.

Due to fears of supply disruptions, commodities prices soared while cryptocurrencies, the S&P 500, and NASDAQ plunged into a technical correction. However, the markets recovered by Friday, with Bitcoin closing Sunday night down just 2.7%.

At press time, BTC’s price oscillated at $43,345, noting a 6.01% rise in the last day.

That said, data presented that Bitcoin traded at a 6% premium on Binance’s Ukrainian hryvnia (UAH) market as demand for cryptocurrencies soared immediately following Russia’s invasion. The premium measures the difference between the price of Bitcoin on UAH markets versus USD markets.

Furthermore, BTC trading volumes using RUB have surged to the highest since last May. Those based in Ukraine’s UAH have reached a level last seen in October 2021. Clara Medalie, head of research at Kaiko, said:

“The trend follows a wave of sanctions against Russia, which has disrupted forex markets and caused the ruble to sink to record lows against the dollar.”

Tether and USD Premiums Soar

Bitcoin wasn’t the only crypto asset trading at a high premium; Tether premium spiked to a 4-month high as the asset remained volatile.

The country’s cryptocurrency exchange Kuna witnessed an explosive rise in trading volumes, as highlighted in an article before. In contrast, other crypto exchanges saw a massive transaction surge.

The increase in demand was so prominent that people were even willing to pay a premium on coins stablecoins and Bitcoin and Ethereum. Notably, a premium on an asset reflects the high demand for assets that often exceeds its supply.