Despite falling Bitcoin price: Bitcoin booms in Venezuela. In the first few days of December, the leading cryptocurrency in terms of market capitalisation set new records in the crisis-planned country.
Venezuela is the best example of how Bitcoin can be more attractive than the country’s own currency despite high volatility and technical improvement opportunities. The country, which has confirmed a six-figure inflation rate for 2018, is struggling with economic crises. Workers who receive their wages in the morning must exchange their national bolivar for goods as quickly as possible before the money is worth nothing. For many, it is therefore obvious to convert the money into Bitcoin and use the cryptocurrency as a store of value.
As you can now see from data, the Bitcoin trading volume climbed to a record high here on 1 December. A total of 1,284 BTC changed hands in Venezuela via the P2P platform Localbitcoins alone. This was not without reason. Finally, the government under President Maduro decided on the same day to devalue the national currency by a full 40%. According to Bloomberg, President Maduro had only raised the minimum wage by 150 percent a month the day before.
Just an Eyewash
As Bloomberg further reports, the artificial increase in the minimum wage is the sixth action of its kind this year. However, the fact that the wage increases can hardly keep up with the economic grievances in the country quickly makes Maduro’s actions a sham. After all, the population suffers from an inflation rate of 199,900% in addition to food and drug shortages. So it is hardly surprising that even petroleum is becoming more and more “expensive”. The country’s own cryptocurrency, which is supposed to represent the country’s oil reserves, is to rise from 3,600 Sovereign Bolivar to 9,000 SB.
The introduction of Petro led to turmoil in the Bitcoin community at the beginning of the year. At first, it sounded quite positive that a country was now issuing its own cryptocurrency. But when it turned out that the Petro only serves to flush fresh capital into the state coffers while the country is bleeding out, it soon became disillusioned.