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91% of Russian Crypto Users On Huobi Global Are Long-Term Holders

Over the past year, Russia has become a leader in terms of the overall growth in demand for digital assets and the number of cryptocurrency holders. The latest report by Research and Markets states that Russia is among the leading countries in crypto adoption.

The number of exchange accounts registered by Russian traders on the Huobi Global exchange has grown by 212.5% since the beginning of 2021, and the number of new users from Russia is growing by an average of 37.08% per month.

Analysis of associated metrics sheds light on the reasons behind such dynamics. To better understand the behavioral factors, trading models and investment preferences of Russian users, Huobi Global conducted an analysis of the latest data related to the given audience segment. Data regarding the movements of digital assets on exchange wallets over the past five months has been taken into account during statistical analysis and revealed that 91.06% of Russian traders buy cryptocurrencies for long-term investment. The category of long-term holders (LTH) includes account owners who have not moved any previously purchased assets for a period of at least three months.

The analysis has also revealed a peculiar finding, which showed that the LTH was lower among users from other major countries. For instance, only 48% of crypto users are LTH from the US, 31% in Venezuela, and 24% in South Africa. The use of cryptocurrency as a store of value is most commonly followed by staking, lending and payments, while direct use of cryptocurrencies as a medium of exchange is not seen as an important use case by the Russian audience.

Analysis of investment preferences revealed that the majority of long-term holders from Russia invest in the following cryptocurrencies, 36% in Bitcoin, 27% in ETH, 18% in USDT, and 10% in DOGE. USDT is the most notable asset in the given section of analysis, given that it is mostly used for settlements, and not as a long-term investment. Russian users may be viewing the stablecoin as a secure means of capital preservation.

Such market analytics indicate that the majority of Russian users have great confidence in cryptocurrencies, but also exhibit a high degree of FOMO (fear of missing out), which forces many to buy various digital assets under the conditions of a bearish market in hopes of making a profit on an ensuing bullish market.

A similar pattern of behavior is inherent for countries with a low level of trust in the local financial system. The citizens of such economies buy cryptocurrencies, traditional stocks and precious metals to preserve their savings. In Russia, the demand for gold has spiked by 37% over the past year.

Digital assets are gaining popularity among the Russians mainly due to falling bank interest rates, limited access to the global capital market and international transfers, as well as a high entry threshold in the real estate and the stock markets.

The results of the study suggest that the surge in the number of LTH transactions is driven by crypto retail investors who are interested in digital assets, as there are not many other options for making savings and generating passive income in the country. The local cryptocurrency legislation may have also affected investor behavior, as it currently prohibits the use of digital assets for daily commercial payments, which is another reason why users prefer long term investing.

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