News coming out of troubled Venezuela indicates that Bitcoin trading has reached an all-time high. This is on the backdrop of hyperinflation and an ongoing presidential conundrum that has plagued the country for a while.
Bitcoin weekly trading volumes in the country reportedly went above 2000 BTC (Roughly $6.8 million) on peer to peer platform LocalBitcoins, week ending February 2. The recorded traded volumes on peer to peer platform LocalBitcoins are just a fraction of overall estimated Bitcoin trading by Venezuelans.
The general area surrounding Venezuela has raised eyebrows as TrustNodes reports, since there has been a recent surge in Bitcoin trading. The total value of Bitcoin trading volumes by Venezuelans is difficult to estimate though, since the trades are usually executed in local currencies.
Trading volumes on LocalBitcoins have also surged in neighboring Columbia, with both countries reportedly accounting for 85 percent of trading volumes on LocalBitcoins, in Latin America. According to Cointelegraph en Espanol, the first 5 weeks of 2019 have seen Venezuela record 8571 transactions while Columbia has recorded 1709 transactions. The transaction numbers in Venezuela represent a 4 fold increase from the numbers recorded in summer 2018 according to TrustNodes.
Venezuela is going through what some might term a “financial catastrophe”, despite having the largest oil reserves in the world. The IMF predicted last year that the inflation rates in the country could potentially reach ten million percent in 2019.
The country’s economic fortunes were worsened by US imposed sanctions that came into effect back in 2017 that were targeted at the Venezuelan president, Nicholas Maduro’s regime. The situation in the country worsened after the country’s National assembly declared Maduro’s May 2018 re-election victory, invalid. This left the country with a presidential crisis to nurse amid all the economic static.
Juan Guaido is currently the new self-proclaimed president of the country, and is heavily backed by local as well as international leaders.
Venezuela has been trying to circumvent US sanctions by looking to crypto, which they have found difficult to do, after the coin raised validity concerns. The country recently adopted a new crypto regulation bill which lists the required licenses for mining and introduces fines for unlicensed activities.
Venezuela’s crypto fortunes seem to be tied directly to her economic and social-political fortunes. At the moment it all looks bleak but things may change for the better should the political and economic landscape change for the better.