Bitcoin (BTC) trading volumes on LocalBitcoins, a leading peer-to-peer (P2P) cryptocurrency exchange, have increased significantly in countries suffering from political and economic uncertainty.
Since the beginning of this year (January 1st, 2019), 160 billion bolivars (appr. $63 million) worth of bitcoins have been traded on LocalBitcoins by Venezuela’s citizens. In the past week, a record 25.16 billion bolivars in BTC were transacted via LocalBitcoins by Venezuelan residents.
In the past year, bitcoin trading volume in Venezuela through LocalBitcoins has been increasing steadily and has now reached an average of 2,000 BTC per month. Notably, this figure represents a 10x increase in total monthly trading volume in the last 14 months – as there were only about 200 BTC being traded via LocalBitcoins in January 2018.
Most Venezuelans Focused On “Finding Enough Money To Survive”
Analysts have argued that Venezuela’s citizens have turned to investing in bitcoin and other decentralized cryptocurrencies because the South American nation’s central bank-issued fiat currency, the Bolivar, has become practically worthless due to extreme levels of hyperinflation.
However, José Rafael Peña Gholam, a Venezuelan citizen, recently revealed that the oil-rich country is not adopting bitcoin at the rate that mainstream news outlets have suggested. In a detailed blog post on LongHash (published on February 28th, 2019), Gholam wrote:
All the stories about our economic, political and social crisis make it easy to forget that in Venezuela, there is still life and movement. And in spite of all the chaos in the country, most people are not engaged in political conflict. They are just focusing their efforts on finding enough money to survive.
“Let’s Not Overstate The Popularity Of Bitcoin”
Gholam also mentioned that “a great migration is happening” as “many people [he] knows have already migrated to other countries.” He added that “there are more people living on the street and eating out of the garbage than I have ever seen in my life.” Going on to acknowledge that bitcoin is increasingly being used by Venezuela’s residents as digital assets have become a “lifeline” for some of the nation’s residents, Gholam also noted:
Let’s not overstate the popularity of bitcoin in Venezuela. And please don’t use our crisis to attract attention to your crypto campaign. I don’t want to single out just one project, as there are many examples, including the supposed more than 2,500 merchants who accept Dash in the country, an airdrop campaign from AirTm and a lesser known crypto donation project from Coinbase
Gholam pointed out that “the problem” is Venezuelans that are able to transact in cryptocurrencies are usually “not the ones in most urgent need of help.” Moreover, digital assets are still “unknown” to most Venezuelans as the average person in the country works hard every day to barely “make enough money to eat,” Gholam revealed.