Bitcoin Uptake In Venezuela Rises As Inflations Hits The Roof
The country launched the petro crypto as a means of stabilising inflation
Demand for Bitcoin In Venezuela Hits Record Levels
The ongoing economic crisis in Venezuela has forced a number of citizens to relocate to neighbouring countries. The country’s currency continues to be devalued on a daily basis. One notable development is that the demand for cryptocurrencies and bitcoin has soared.
Data provided by Coin Dance has revealed that in the past one week about 300 million bolivars in bitcoin was exchanged. As this week progresses, the figure might soar higher with locals exchanging bitcoin worth 292 million bolivars by Tuesday. Exchanging bitcoin with Bolivar began early this year.
The tough economic crisis has led to a humanitarian crisis with residents believed to fleeing on foot. Life in the South American country has become unbearable for many. Data from IOM has revealed that for the last three years, about three million Venezuelans have fled. Brazil and Colombia are among the preferred destination by Venezuelan immigrants.
Venezuela’s Remedy For Inflation
Bitcoin’s rising demand has been caused by the high inflation with the crypto acting as a hedge. Experts believe that the devaluation of the bolivar is responsible for the rising bitcoin trading volumes. The devaluation accelerated in the recent weeks. A significant development last month has also been cited as the reason behind the increase in bitcoin demand. Five zeros were removed from the Bolivar after inflations rates soared to catastrophic levels.
The stripping of zeros looks like it did not tackle the inflation problem. By estimation, Venezuela’s inflation has reached 100%. According to Bloomberg, the coming days will be key to watch if the two-month-old new Venezuela’s currency will have any impact on inflation.
President Nicolas Maduro has also taken a number of measures to try and stabilize the nation’s economy. Maduro recently ordered for the pegging of the bolivar to the recently created petro crypto. The move was meant to counter increasing sanctions from international bodies on top of fighting the rising inflation.
Maduro expected that residents will quickly adopt the petro, but the uptake has remained very low. A section of residents even wonder if the crypto exists. Despite the concerns, the state is implementing measures to increase crypto adoption. Maduro wants the Petro to be classified as the second unit of account. From next Monday, the petro will become the second unit of account as ordered by Maduro on live television.