Crypto Weekly: Tumbling together

Mads Eberhardt 400x400
Mads Eberhardt

Cryptocurrency Analyst

Summary:  The crypto volume against the Russian ruble has tumbled since the first sanctions in late February, highlighting that crypto is not being used much to evade sanctions. What has also tumbled this month are non-fungible tokens volume and floor prices, showing that they are not insensible to global uncertainties.


Russian crypto volume tumbles

For the past weeks, there has been speculation that crypto would be a means for Russia to evade Western sanctions. As we see it, it is unlikely that Russia can seriously evade sanctions using cryptocurrencies due to several reasons namely that carrying out the sanctioned activity with crypto as the medium of exchange instead of fiat does not suddenly make the activity legal. Nevertheless, if one is utilizing cryptocurrencies to bypass sanctions, it should be quite easy to identify and stop it due to the public nature of cryptocurrencies. One more reason is that the Russian crypto market is somewhat illiquid, making it challenging to bypass sanctions to a large degree.

What originally fueled the speculation of the evasion of sanctions using crypto was increased crypto trading against the ruble following the new sanctions in late February. On the 24th of February, Russian volume peaked with crypto worth $70.7mn traded against the ruble. In the first place, this is not much considering the size of Russia. On Thursday last week, the volume was reduced by half with $34.1mn traded against the ruble on that day. In our opinion, this indicates an illiquid market not presently able to facilitate notable evasion of sanctions, no matter whether we are talking $70.7mn or $34.1mn in volume a day.

NFT prices and volume plunges

The crypto trend of 2021 namely non-fungible tokens (NFTs) extended well into January beating the prior all-time high-volume set in August 2021 on the largest NFT marketplace OpenSea with a January volume of $5bn. However, some fatigue started to spread in the NFT market in February, as almost $1.5bn was cut off OpenSea’s monthly volume. When February became March, it seems the February sentiment was likewise carried over to March. The OpenSea volume has solely been slightly more than $400mn month to date, on average around $70mn a day, from an average of $127mn in February. Simultaneously, the floor price has tumbled in Ether across the most popular NFT series such as Bored Ape Yacht Club. With Ether tumbling in USD in March as well, the fatigue in the NFT market has been intensified, indicating that the NFT market is not insensible to global uncertainties on this scale.

03_MAEB_1
Source: NFT Price Floor

Crypto Nation’ Switzerland expands

Switzerland has for years been a country with a high concentration of crypto companies and projects. Ethereum was founded in the city of Zug, Switzerland, and the foundation of Ethereum, Polkadot, and Cardano also operate out of Zug, which has been known as Crypto Valley. Another Swiss city now wants to compete domestically with Zug namely Lugano. The city of Lugano plans to make Bitcoin, the largest stablecoin Tether, and the CHF stablecoin LVGA ‘de facto’ legal tender in the city as part of its Plan B in collaboration with Tether. The plan aims to make Lugano a major European blockchain hub.

03_MAEB_BTC
Bitcoin/USD - Source: Saxo Group
03_MAEB_ETH
Ethereum/USD - Source: Saxo Group

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.