Venezuela has set a new record for bitcoin trading on the popular peer to peer site LocalBitcoins. It is one of the preferred sites for Venezuelans to purchase and sell cryptocurrencies. They are turning more and more to alternative currencies as a store of value, such as crypto. Their fiat currency has lost a big part of its value again just in the last week.
Trading Record on LocalBitcoins
Venezuela has yet again broken trading records on LocalBitcoins, one of the biggest trading p2p platforms used in the country. LocalBitcoins is popular because it is a somewhat decentralized exchange that lets users trade crypto assets between them, without having to reveal their identity — thing that for most Venezuelans is crucial.
According to Coin Dance, an aggregation site that lists the amount of bitcoin traded per country in different platforms, Venezuelans traded more than 1,075 bitcoins just the last week, breaking all previous domestic trade records. Not even when the big price hike in December happened were trading volumes higher.
This, of course, is an answer to an ongoing situation that has been happening in Venezuela: the aggravated inflation levels and the high devaluation that the country is experiencing. Venezuelans are effectively buying cryptocurrencies to protect their purchasing power from the raging loss of value that their fiat currency is experiencing.
Venezuela Embraces Bitcoin
Venezuelans have embraced cryptocurrencies as a method of saving due to the relatively easy way of getting them through platforms like LocalBitcoins, allowing them to acquire crypto with local currency through making bank wires.
The local currency has lost a lot of its value in less than a month. There are no official numbers of inflation and devaluation: the Central Bank Of Venezuela has not provided data for more than three years, so there are no statistics to demonstrate this fact. But there are unofficial pages that compute the value of the US dollar and bitcoin.
According to the most popular unofficial index page, called “DolarToday,” the US dollar has gone from a value of 100 bolivares (the national fiat currency) to almost 250 bolivares in less than three weeks. This goes to show the precarious economic situation that Venezuelans have to deal with every day.
The Failed Cryptocurrency: Petro
The government of Venezuela launched a failed monetary plan that sought to improve the situation by applying a series of measures to help create a stimulating environment for businesses to thrive, but it has failed. The government relaunched the official cryptocurrency, the Petro, and tied the minimum wage to the value of it.
Devaluation and inflation keep growing, and the promise of the Petro has not crystallized yet. People still cannot even buy Petro with the local currency, and wallets are still not functional, making the Petro a work in progress. More so, the government has indicated that payments like passport fees must be paid in Petros, raising doubts and angst among the local citizens who need to receive these documents.
That is why Venezuelans are flocking more and more to use cryptocurrencies as a store of value, to preserve their buying power from the devaluation that strikes them day by day.
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