Russians Flock to Bitcoin as Ruble Collapses

Russia is the latest victim of fiat currency collapse. Current Russian fiat to bitcoin value transfer is reminiscent of the Cyprus March 2013 12-day lockdown on money movement – when bitcoin was used to funnel funds out of Cyprus. Similar BTC payments have been flowing out of Russia this week. And the volume of rubles leaving the Motherland in $btc is unprecedented.

Russian Ruble 6 Month Chart, Price & Volume


The chart above shows the last 6 months bitcoin trading volume and price of the Russian ruble. Of note is the lastest data which is a huge spike over any previous volume in the period. The highest volume previously reported in the period is 8.32 million on October 05 2014. This week’s high volume day of 17.1 million easily doubles that:

Ruble Volume Spike

Date Volume BTC traded
October 5 8.32 million
December 15 17.1 million

Woes of the Ruble
The ruble has lost more than half of its value against the dollar in 2014. The Moscow Times describes the cause of the drop in the ruble against the US dollar as having three main reasons: fall in price of oil, economic recession fears and political sanctions. Bloomberg Business Week reports that the ruble lost 9 percent in 24 hours, the worst single-day drop for the ruble in 16 years.

The currency woes have changed from concern to panic as the ruble has reached new lows.

The Russian Central Bank stepped in to stabilize its own currency by selling off foreign reserves and buying back rubles, and making a huge increase in interest rates from 10.5% to 17% on December 16 2014. Despite the 6.5% hike the immediate result was said to be ineffectual.

Western financial media reported Russian consumers buying to convert their rubles into consumer goods, ostensibly for preservation of value. And along with the rush to alternative forms of value has come the bitcoin ruble crash and rally.

Ruble Last 7 days
The ruble price and volume 7 day graph is remarkable. Against months of steady decline the week’s data and in particular Tuesday December 16 2014 shows an incredible price drop. The graph shape is not unlike a waterfall – and a ruble price collapse against the blue $BTC index is stark:


We do however see buoyant signs of life in the ruble in most recent hours. On Thursday December 18 the ruble rose sharply against the Global Bitcoin Price index. In fact the price index was moving down and the Russian ruble was moving up in a precipitous move somewhat mirroring its earlier decline.
At time of writing its too early to know which way this is really moving, but most certainly it is of interest whatever way it goes.

Ruble Last 24 Hours


Bear Drag
The current bear market which started earlier this week is likely to profoundly stifle any ruble recovery. Reddit comments on December 17 2014 suggest malicious power play manipulation is one possible reason for the bitcoin downward pressure on the global bitcoin price. Huobi commented “Is it heavily manipulated? Yes. Is government behind it? Probably not.”

Crypto Benefits Takeaway
It is most interesting to see Russian population back bitcoin in droves despite an official government stance to the contrary. We see the reliance on bitcoin as an alternative value store when traditional fiat currency goes south. Some say it is only a matter of time before similar movements are made with the US dollar and Euro in times ahead – not unlike what we see today with the Russian ruble.

It’s a good thing we have the blockchain.

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