Bitcoin Trading in Venezuela Just Hit an All-Time High Despite a 40% Premium
Matt Odell, a cryptocurrency researcher, said that the volume would be higher if the 40 percent premium in the Venezuelan market is priced in.
2454 bitcoin weekly volume x $3650 = $8,957,100 this week ÷ 7 = $1,279,585 per day on average, higher if you account for the ~40% price premium which I didn’t.
— Matt Odell (@matt_odell) February 11, 2019
Demand For Bitcoin in Venezuela is Skyrocketing
Amidst an intense economic recession and uncertainty in the country’s government, the Venezuelan bolivar has essentially become valueless.
The people of Venezuela have continued to suffer from a lack of basic necessities in the past several months. The situation has noticeably worsened when the government blocked U.S. humanitarian aid from coming into the country through the Columbian border.
NBCNews reported that sacks of rice, canned tuna, and biscuits packed by volunteers were stopped by the border by the Nicolas Maduro administration, which is scrambling to remain in power following the emergence of opposition leader Juan Guaidó.
Lester Toledo, the representative of the aid mission led by Guaidó remains optimistic that the aid will be let into the country to help tens of thousands of malnourished children.
“I am convinced that the way we are going to pass this aid is with the Venezuelan people. People, people and more people bringing in humanitarian aid,” Toledo said.
But, the humanitarian aid sent by the U.S. government is continued to be stopped at the border by the Venezuelan military and it is uncertain when it will be let through.
The Venezuelan people are finding it difficult to wait for the government to open its border and welcome the assistance from the U.S. government. As long as Nicolas Maduro finds a way remains in power, the military is expected to prevent any aid from coming into the country.
In recent weeks, Venezuelans have turned to Bitcoin for hope, attempting to utilize the digital currency to purchase foods and necessities.
Jim Epstein said in 2017:
Bitcoin mining requires a lot of computer processing power, which in turn requires a lot of electricity. In most of the world, utility bills eat into the cost of mining. In places where energy prices are high, it can even be a losing proposition. But in Venezuela, the government has turned bitcoin mining into something akin to owning a home mint.
Will the Volume of Bitcoin Continue to Increase?
— Zack Voell (@zackvoell) January 23, 2019
It is highly unlikely for Bitcoin to become the main currency of Venezuela in the foreseeable. If a new administration takes into effect, it will attempt to revive the national currency.
But, as RT host Max Keiser explained, Bitcoin is operating as a lifeline to many Venezuelan residents and it will continue to do so in the foreseeable future.