In last week alone, Venezuela has seen a sudden spike in bitcoin volume with an astounding $7 million worth of Bitcoin traded on LocalBitcoins.
Trump and major U.S. allies have sought to unseat Venezuela’s authoritarian socialist president, Nicolas Maduro, and replace him with Juan Guaido, the leader of the country’s political opposition.
“It could be days, months, years until the inevitable collapse,” said William Brownfield, a former U.S. ambassador to Venezuela who supports the current policy. “This is a time of great opportunity and a time of great danger.”
Other reasons for the impending economic crisis in the country is the flooding of the oil market by the Saudis. It was done to punish Russia but all the countries that were reliant on oil were affected.
This is the biggest cause for the recent interest in cryptocurrencies in the country. Justice Maikel Moreno of the Supreme Tribunal, just ordered that Guaido is investigated, and his accounts frozen. In response to this announcement, commentators have stated that Guaidó is likely not be disconcerted by this news, as he has always been a proponent of the Bitcoin cryptocurrency.
The financial news reporter Keiser, further alludes to his Bitcoin holdings, by referring to Guaido as a member of the millennial generation, and could easily posses all his liquid assets on his mobile device in a short amount of time, conclusively “unconfiscatable”.
Volumes have surged across most Latin American countries including Mexico, Argentina, Chile, and Colombia. Although Venezuela is the most striking increase.
The IMF reported back in July that the Latin American country was on track to hit an inflation level of one million percent by the close of this month. In neighboring Chile and nearby Peru, inflation is set to reach 3 percent and 3.7 percent respectively.
In that context then, it’s hardly surprising that bitcoin makes an appealing alternative to a national currency that’s running out of use–except as toilet paper, which is also scarce in this South American nation. And if you thought one million percent was out of control, that figure could reach as much as 10 million by the end of 2019.
