The subject of many 2018 headlines, inflation-stricken Venezuela is now posting its highest level of bitcoin volume to date.
Venezuela flocking toward bitcoin
Last week Venezuela saw more than 2,000 bitcoin (BTC) in total volume, a first for the country according to a February 6 report from TrustNodes.
At current prices, 2,000 BTC equates to more than $6.8 million in bitcoin transactions, according to CoinMarketCap price data. Taking into account last week’s slightly higher BTC pricing, the country looks to have tallied close to $7 million in BTC volume. According to TrustNodes, Venezuela reportedly achieved such numbers via an exchange called LocalBitcoins.
Notably, the exchange utilizes over-the-counter (OTC) trading and transactions.
A recent Crypto Insider article explained,
This [LocalBitcoins] is the kind of financial exchange that doesn’t influence the market price directly, but affects the circulating supply by potentially producing scarcity. However, using Local Bitcoins isn’t all about economics or political reasons that drive people to avoid big exchanges: it enables bitcoiners to discover fellow enthusiasts around their area, and then meet, connect, and become part of communities.”
A stark rise in bitcoin popularity
TrustNodes also mentioned bitcoin volume in Venezuela has risen 400% since last summer’s 500 BTC volume totals. With reported inflation levels above 1,000,000%, the added BTC volume appears to make sense according to TrustNodes.
The media outlet continued,
The country is under sanctions, potentially making it difficult to move fiat in and out. There’s also reports of Venezuelan authorities seizing gold or cash. So making bitcoin an option to bypass sanctions or to minimize the chances of the assets being seized.”
Additionally, Venezuela might still have further woes ahead as its president, Nicolas Maduro, reportedly is in conflict with “opposition leader Juan Guaido,” as detailed by The Telegraph on February 6.
Increased BTC volume reasoning?
One explanation for the rise in BTC volume since summer 2018 could be due to bitcoin’s drastic drop in price since that time. July 2018, for example, hosted bitcoin prices higher than $8,000 at times. It is logical people might have needed less BTC to move more USD value, due to BTC pricing at the time.
Still, numbers in Venezuela appear to be up, as 500 BTC at $8,000 per BTC still only equates to about $4 million, which is significantly lower than last weeks mentioned volume highs.
Furthermore, flocking to a decentralized asset such as bitcoin makes sense when other options, like Venezuela’s dollar, have failed. The Venezuelan-backed Petro cryptocurrency also has seen its fair share of skepticism and difficulty, as Crypto Insider reported last November.