Russians are paying up to $20,000 premium to buy Bitcoin

March 2, 2022 Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Metaverse, NFTs, FinTech and Alternative Finance, Fintech International, Fintech Services, Fundraising, Investing, Trading, Innovation and Resources, Personal Finance, Stories No comments

Crypto Slate | Samuel Wan | Mar 1, 2022

bitcoin premium in russia - Russians are paying up to $20,000 premium to buy Bitcoin Sanctions bite leading to the collapse of the ruble. Data suggests Russians are turning to Bitcoin to protect themselves from the fallout.

Media outlet DeFiprime.com noted Bitcoin is trading for up to $20,000 above the market rate on Russian exchanges.

DeFiprime.com jokingly called this the “matreshka premium,” as a spin on the kimchi premium, which was a prevalent phenomenon from around 2016.

See: Crypto’s use case during times of conflict

“Matreshka,” or the matryoshka doll, are colorfully painted wooden dolls of decreasing size nestling inside another. It is perhaps the best-known symbol of Russia, representing respect for the elderly, family unity, fertility, abundance, and the search for truth and meaning.

Although “matreshka premium” doesn’t have the same ring as kimchi premium, the two exist for similar reasons.

Blast from the past: Kimchi premium

The kimchi premium is a term used to describe the price difference between tokens on Korean exchanges compared to the rest of the world. The most significant difference was primarily seen in Bitcoin.

Around 2016, North Korean leader Kim Jong-un was ramping up tensions in the region, including missile testing. Incidentally, missile launches have resumed in 2022, indicating a return to hostilities.

See: Pomp: We Should Not Normalize Economic War On Innocent Civilians

This led to capital controls restricting money flow into and out of Korea. The ensuing difficulties in moving money led to backlogged demand and a temporary boost in cryptocurrency prices.

At the height of the kimchi premium, Bitcoin was trading for as high as 50% above the market rate. While it still exists today, it’s much less prevalent, coming in around 5%.

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