Once the richest nation in South America is currently undergoing a high inflation rate, as a result, donations are now being made in Bitcoin to support people in Venezuela. This has indirectly spiked the trade of Bitcoin and has sent trading volumes to the moon in the country to its all-time high.
Venezuela’s Bitcoin Trading Volume Hits All-Time High
Venezuela has recorded an all-time high in Bitcoin trading volume of over 2,000 BTCs (presently valued at $7 million). In comparison to the 500 BTC volume which was recorded in Summer 2018, this is the highest ever recorded. The data which was culled from LocalBitcoins reveals a high level of interest in the virtual currency [bitcoin] over the past few months.
The sharp increase in volume has been attributed to some factors. For instance, the high level of inflation which has gone up 1 million percent, devaluing the country’s fiat currency. Thus, people are now relying more on Bitcoin given that its price has been less volatile within the past month.
United States Sanctioning Affects Venezuelan Economy
Also, there is the most recent US sanction on the energy firm, PDVSA to consider. As a consequence, this greatly affects the government’s revenue. The country’s authorities, on the other hand, have not made matters easy given that they are seizing cash and gold from people. Therefore, people in a bid to move their funds have relied on the digital currency instead which cannot be controlled or seized.
Venezuelan Government Blocks Humanitarian Shipment
Reports from the country also pointed out that Nicolás Maduro, the contested president of Venezuela recently blocked the entry of a humanitarian shipments. According to him, it could be a ploy by the U.S. to invade the country and as such, “no one will enter, not one invading soldier.”
However, Juan Guaidó, Venezuela’s acting president as well as Miguel Pizarro, a lawmaker were not quick to agree with Maduro. According to the acting president:
You know there’s a red line, you know well there’s a limit, you know that medicines, food and medical supplies are that limit.
Despite these limitations in accessing food and other basic items, citizens of the country have found a way to cope, and that is with the use of Bitcoin. Moreover, donations are being made by people outside the country using virtual currencies, most especially, Bitcoin. These assets are then converted to fiat, and food is purchased and sent to citizens in need.
BTCNN on January 17 also revealed that Venezuela is one of the top countries where Bitcoin was traded in 2018. Other countries are the U.S., U.K, China, and Nigeria. In the case of the latter, they all recorded a decline in their trades while Venezuela saw an increase in trades.