Portrait of a Russian crypto investor — KuCoin study

In August, crypto exchange KuCoin published the report “Inside the Crypto Universe: Users from Russia”, based on a May survey of 500 Russians aged 18 to 60 who own or have invested in cryptocurrencies in the last six months.

We examined the data and compared them with reports on Japan and Germany. We discuss the similarities and differences among crypto investors from different countries.

Adoption of cryptocurrencies: Zoomers — the most active investors

KuCoin estimates that more than 15 million Russians own cryptocurrencies, or 18% of the adult population. The same figure for Germany is 16%, and for Japan only 5%.

Around a third of Russian users have been on the market for more than three years, 64% longer than a year.

Meanwhile, 32% of respondents invested in cryptocurrency from 10 000 to 100 000 rubles, and 21% — more than 500 000 rubles. 51% of Gen Z representatives invested more than 100 000 rubles in digital assets.

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“In recent years, the trend in the number of Russian users has aligned with the general market conditions worldwide, though we observed some level of growth in trading activity in the first half of 2022,” notes Anton Starchenko, head of KuCoin’s CIS business development department.

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In Russia, Zoomers are the most active entrants: 29% bought cryptocurrencies less than six months ago, 44% in the last year. In Germany, millennials lead with 50% and 58% respectively.

Investment motives: long-term accumulation and a stake in the future

66% see cryptocurrencies as a means of long-term capital accumulation, among other motives — preserving asset value, diversification of risk.

35% of KuCoin’s Russian clients view investing as a way to become part of the future of finance. Such sentiment is somewhat higher among Zoomers and Millennials: younger generations are more inclined to view digital assets as an integral part of the financial system.

In Germany long-term investors also lead, with the motive “for entertainment” (32% of respondents) in second place.

Japanese users primarily view cryptocurrencies as the technology of the future (44% of respondents) and as an investment vehicle (40% of respondents).

Investment portfolio: Bitcoin — undisputed leader, Ethereum — deserved second place

Russian users invest most in Bitcoin (81%) and Ethereum (41%). The greatest interest in these assets is shown by Generation X (ages 45-60).

86% of respondents in this age group own digital gold, 45% — Ethereum.

In Germany, 64% of respondents invested in the first cryptocurrency, in Japan — 70%. Ethereum also sits in second place with 40% and 43% respectively.

Generations Y and Z lead in investments in the relatively new market segments: DeFi, NFT and the metaverses.

Although Japan is the homeland of the Shiba Inu dog, interest in meme coins in the country is minimal. Only 8% of Japanese are interested in such assets. In Russia this figure is 10%, in Germany — 14%.

Use of cryptocurrencies: 41% of Zoomers make online purchases

Trading is the main use case of cryptocurrencies across all reports. In Russia 45% of respondents engage in it, in Germany 49%, in Japan 33%.

Meanwhile, a third of Russian users make online purchases with cryptocurrencies. 41% of them are Zoomers, which indicates rising acceptance of cryptocurrencies as a payment method among Russian youth.

23% of respondents also perform P2P transfers in cryptocurrencies, and 20% receive or pay salaries in them.

17% of Russian users pay with cryptocurrencies NFT. Among them, millennials lead with a 23% share.

Sources of information about cryptocurrencies: friends, family and Telegram

35% of Russian investors obtain information about digital assets from friends and relatives, which highlights the prominent role of the “word of mouth” in the industry.

32% of respondents rely on the opinions of other traders, 25% communicate with like-minded people in crypto communities.

Official exchange sites, crypto project sites and regulators are the most trusted sources for 47% of Russian users. They are followed by crypto media trusted by 42% of KuCoin clients.

Telegram is the most popular among investors: information from this social network is trusted by 30% of respondents. The same figure for YouTube is 27%, for VK — only 11%.

For comparison, in Japan, YouTube leads (32%), followed by X (23%), and Telegram is seventh with 5%, behind the country’s popular Line (15%), Instagram (13%), TikTok (9%) and Discord (6%).

The future of the crypto market: digitisation of the ruble and regulatory uncertainty

The results of the study show that cryptocurrencies have become a long-term investment for millions of Russians. A large share of them have been in the market for more than a year, which suggests user confidence in the future of the crypto industry.

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“The Russian cryptocurrency market is marked by regulatory uncertainty, dependence on geopolitical factors that can influence investor behaviour, and the presence of large local communities on social media. The potential consequences of adopting a digital ruble should also be considered—the need for greater regulatory clarity and the emergence of discussions about the advantages of digital assets. Crypto exchanges will be able to integrate the digital ruble, leading to new services,” says Anton Starchenko, head of KuCoin’s CIS business development department.

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In the second half of 2023 the exchange plans to publish analytical reports on Turkey and South Korea.