The Bolivar of Venezuela has been in such high inflation that bitcoin trading volume has been record-high. Estimates claim that inflation has reached 10.000% which leads investors to alternative methods when storing value.
A cup of coffee now costs 2,800 bolivars (21p; 28 cents), up from 0.75 bolivars 12 months ago – an increase of 373,233%, according to Bloomberg data. And that’s after a 2018 devaluation that knocked five zeros off the currency.
Why is bitcoin popular in Venezuela?
The bitcoin has been extremely popular since the end of last year when the price was significantly high due to the media attention it got. The current economic crisis in Venezuela has caused a lot of problems with their current fiat-currency, Bolivar. That particular relation has forced investors to find other ways to invest and store their money.
How can trading volume be at a record-high when it’s illegal?
Bitcoin trading is illegal in Venezuela and Columbia, but trading volume is higher than ever. Venezuela has such a big economic crisis that nothing is under control. The country has a government that has no control over how people are using their money or their internet connection, nor can they stabilize their own fiat-currency which makes investors very scared and afraid, hence investors use alternatives to the Bolivar.