Bitcoin Trading Volumes Surge in Venezuela Amidst Political Crisis

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Bitcoin Trading Volumes Surge in Venezuela Amidst Political Crisis

Bitcoin Trading Volumes Surge in Venezuela Amidst Political CrisisJust as a truck convoy loaded with humanitarian supplies for thousands of Venezuelan families was blocked by the embattled government of President Nicolas Maduro on February 8, Bitcoin trading in that South American nation reached record levels. Since the final week of January 2018, Bitcoin traders in Venezuela have been very busy thanks to the doomed sovereign bolivar, a fiat currency besieged by hyperinflation in the midst of a dangerous political climate. On the day of the humanitarian aid blockade, VES/USD traded as low as $0.0003.

The highest weekly trading volume for Bitcoin in Venezuela took place between January 26 and February 2, when more than 17 billion sovereign bolivars were converted. The previous trading volume record of 1.2 billion bolivars had taken place just one week before. Even though $10 million traded in a week may not seem like a lot on a global scale, it is a considerable sum in an economically depressed nation such as Venezuela.

The History of the Venezuelan Cryptocurrency Market

Bitcoin and other digital currencies have been highly sought after by Venezuelans since 2016, which happens to be the last time the Maduro regime attempted to stop humanitarian aid from entering the country; back then, female activists dressed in white staged protests that eventually convinced soldiers to let the convoy pass. The repressive regime has not made things easy on digital currency holders; undercover government inspectors and informants routinely visit grocery stores and markets to check on cryptocurrency retail transactions. A new law passed this year aims to curtail the operations of digital currency exchange platforms in the country, and it also gives soldiers and police officers powers to confiscate mining rigs.

Fearing frozen bank accounts and asset seizures, thousands of Venezuelans have been rushing to exchange cash and other holdings into Bitcoin. Opposition leader and interim President Juan Guaido, for example, is believed to have converted a considerable amount of funds into Bitcoin months ago, and this has been a source of consternation for Maduro after he ordered a seizure of Guaido’s assets. Confiscating financial assets has been a trademark measure taken Maduro against his political opponents, but he has not been able to access Guaido’s digital wallet. In the meantime, tech entrepreneurs are taking a closer look at the situation in Venezuela: a company based in Panama recently announced plans to install a Bitcoin automated teller machine in Caracas, thus making Venezuela the 77th nation to get a cryptocurrency ATM.

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