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Venezuelan Look to Bitcoin for Financial Redemption

Volumes have skyrocketed on LocalBitcoins Venezuela after posting a staggering 2,492 percent increase over the last twelve months, making the stricken South American economy the world’s fastest-growing—but likely the most expensive—market for LocalBitcoins.

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Weekly volumes leaped from 13.7 billion Venezuelan bolívars ($55,533) in mid-January 2019, to 363 billion bolívars ($1.46 million) at the end of last week, according to CoinDance. The week just passed was one of the platform’s biggest on record, having seen an explosive 38 percent increase from the week prior.

This is in spite of the fact the platform may be seeing the highest premiums for Bitcoin in the world. BTC is currently listed on LBC Venezuela no lower than $9,401 (about $1,300 above spot) and the only seller offering a whole Bitcoin has listed an ask price of an outlandish $11,687 per BTC (a $3,580 premium).

LocalBitcoins Puts Venezuela on the List

LBC’s evident growth in Venezuela can be seen as another validation of Bitcoin’s reputation as a non-confiscatable and censorship-resistant store of value.

LocalBitcoins (LBC) is widely considered a platform for facilitating non-speculative purchases of BTC, due to its being a solely fiat-to-crypto exchange, and its charging typically several-hundred-dollar premiums to spot. It is also, crucially, one of the only exchanges that regularly publishes country-specific trade volumes.

As such LBC trade volumes have become a yardstick for quantifying purchases of seeming necessity. And indeed, a closer analysis of LBC data has revealed that the original cryptocurrency is seeing exceptionally high rates of adoption in countries with low economic freedom—countries like Venezuela.

This narrative becomes more convincing when cross-examining with trends on other exchanges. Last year Bitcoin jumped to a $2,250 premium on one of Argentina’s top exchanges after the government imposed capital controls, not too long before LBC Argentina volumes hit their all-time-high.

Venezuela is a “Bitcoinified Nation

For decades Venezuela has grappled with one of the worst national crises in recent history, described by economists as the “single-largest economic collapse outside of war” in the last 45 years. And things don’t seem to be getting better. Last year Venezuela took the title of Bloomberg’s “most miserable” economy on its annual “Misery Index,” which ranks the world’s worst economies based on inflation and employment rates.

Faced with an inflation rate of more than eight million percent, on-and-off capital controls, and a steady decline in the production of oil—which accounts for about 99 percent of Venezuela’s export earnings—Venezuelans would have ample reasons to allocate to Bitcoin.

According to a report, Venezuela is the world’s most Bitcoinified nation in terms of amount of BTC owned per head of population, and amount of income spent on BTC relative to income.

More on Venezuela News

On December 13 2019, Maduro explained on national television that the Superintendence of Crypto-Assets and Related Activities (Sunacrip) will be airdropping 0.5 PTR ($30) next week to eligible citizens who register with the Petro App.

The United Socialist Party leader and Venezuelan president Nicolás Maduro has been marketing the country’s cryptocurrency, the petro (PTR), aggressively recently. In November, Maduro told the public that PTR needs to be just as usable as physical currencies.

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Crypto Stats

CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin49,759 0.24 % 0.33 % 4.57 %
Ethereum1,592.7 0.72 % 2.50 % 13.70 %
Binance Coin248.16 0.25 % 1.67 % 51.67 %
Cardano1.130 1.08 % 8.59 % 27.39 %
Tether1.000 0.27 % 0.38 % 0.19 %
Polkadot33.51 0.08 % 0.91 % 4.94 %
XRP0.4632 1.12 % 1.78 % 13.66 %
Litecoin193.33 0.57 % 6.74 % 18.27 %
Chainlink27.39 0.27 % 3.79 % 15.08 %
Bitcoin Cash526.20 0.80 % 0.11 % 26.61 %