- A new survey shows that about half of retail investors in Russia see cryptocurrencies as a deflationary asset.
- Bitcoin emerged top as the most popular digital asset by social media mentions, outshining Tether and Litecoin.
Russia is proving to be more and more of a crypto jurisdiction despite the tough rules enforced by its government. According to a fresh survey, about half of the retail investors in Russia see cryptocurrencies as a great hedging asset.
The research by financial publication Investing.com, polled 1,000 Russian retail investors, to find out the most requested types of alternative investments. About 46 percent of respondents see cryptocurrencies as a potential defensive asset. This means they see it as an inflationary hedge at times of economic crisis.
Additionally, the participants expressed a preference for crypto assets compared to real estate. Only 37 percent of them considered acquiring real estate as a rewarding kind of investment.
Russia interest in cryptocurrencies
Anastasia Kosheleva, head of Investing.com’s Russian division, says real estate has historically been the popular hedging asset in Russia. However, this year, investing in cryptocurrencies has become the top trend. Other assets, such as foreign exchange currencies and stocks, now lurk in the shadow of crypto assets.
Of all digital assets in existence, Bitcoin (BTC) was the most popular in October, per a study from big data platform Brand Analytics, BTC surpassed members of its kin such as Tether (USDT) and Litecoin (LTC), in terms of social media mentions.
A separate survey by Russia’s Association of Forex Dealers (AFD), found produced similar results to those of Investing.com. Over the years, digital currencies have become increasingly popular among Russian investors, with 77 percent of them preferring Bitcoin to gold.
Last week, the Bank of Russia published a financial stability report, showing the nation’s increasing stake in the $2.8 trillion crypto market. Russia ranks third worldwide in terms of BTC hash rate, the bank noted. The country also has the second-largest traffic to Binance exchange after Turkey.
With mounting inflation and an economic crisis following the COVID pandemic, global investors are increasingly leaning toward cryptocurrencies as a hedge to financial risk.
Damien Courvalin, head of energy research at Goldman Sachs says investors have been using crypto alongside traditional assets such as gold, for inflationary hedge.
“Just like we argue that silver is the poor man’s gold, gold is maybe becoming the poor man’s crypto,” he said in mid-November.
Moreover, Vimal Gor, Pendal Group head of alternative duration strategies, argued the case of crypto as a protective asset. He is of the opinion that cryptocurrencies should be added to new alternative defensive portfolios since government bonds have failed their role as a hedge against risk.
The nation’s central bank has also issued multiple warnings of the financial and consumer risks of crypto assets, but citizens still largely favor them.