Russia's Invasion Triggers 6% Premium on BTC-Ukrainian Hryvnia Trade

Wildly divergent spreads used to be a staple in Bitcoin trading, with savvy traders raking in profits by playing the arbitrage between the pricing on different exchanges, especially in Asia.

Now a 6% premium for BTC has emerged on a trading pair with the Ukrainian hryvnia (UAH), the nation’s currency, as Russia’s invasion of its smaller neighbor roils the crypto markets and burnishes Bitcoin’s role as a form of digital gold.

The premium exists on WhiteBIT, which is the most popular exchange in Russia, according to bitrawr, which ranks exchanges on a per country basis.

More than a third of WhiteBIT’s traffic comes from Russian users and 13% comes from Ukrainian ones, according to similarweb, which tracks website traffic.

WhiteBIT’s fiat trading pairs.

Converting WhiteBIT’s BTC-UAH price to dollars prices the cryptocurrency at $46,167, while the price shown on CoinGecko at the same time, 8PM New York time, is $43,541.

Premiums on digital assets have been known to emerge during times of strife. Ukrainians may be fleeing to BTC and other digital assets, causing the premium to emerge — USDT is trading at $1.12, as opposed to its $1 peg, on Kuna, a Ukrainian exchange.

Heightened Price

Kuna is the most popular exchange in Ukraine, according to bitrawr, though its daily volume is a relatively low $2.1M, according to CoinGecko. WhiteBIT’s volume is much higher — its $733M volume makes it the 28th largest exchange in crypto by that metric and according to CoinGecko.

Like WhiteBIT, Kuna’s BTC-UAH pair prices BTC at a premium when compared to the BTC-USDT pair, even before accounting for USDT’s own heightened price on the Ukrainian exchange.

As further evidence that interest in crypto is spiking in countries affected by the war there has been a massive spike in trades between BTC and the ruble, Russia’s currency, according to Kaiko, a crypto data provider.

While BTC is up 14% against the dollar, the world’s largest cryptocurrency is up 42.3% against the ruble, according to CoinGecko. The ruble has lost 24.4% of its value against the dollar, according to Yahoo Finance.

The total crypto market cap up 10.4% in dollar terms over the last 24 hours, and Bitcoin has shaken off its bearish tendencies of late and surged almost 17% in the last seven days, according to CoinGecko data. Ether, too, has rallied 12.6% in mid-morning trading U.K. time.

The hard sanctions Western governments have imposed on Russia are quickly changing the narrative around digital assets this year. The European Union, Canada, and the U.S. have agreed to sever Russian banks from the SWIFT cross-border payment system and froze the country’s foreign-currency reserves. Kraken Co-founder Jesse Powell, said there is pressure to block Russian users of the platform as retaliation for the invasion.

It was only a couple of weeks ago that the conventional wisdom held that Bitcoin’s role as a store of value was moribund. Now crypto’s leaders say the crisis reinforces the thesis behind blockchain-based assets.

“Bitcoin was invented so politicians can’t delete your money by changing a number in a database,” tweeted Robert Leshner, founder of Compound Finance.