Bitcoin volumes have surpassed all time high in crisis stricken Venezuela, rising above 2,000 BTC for the first time (pictured above).
That translates to about $7 million worth of bitcoin exchanging hands on just one peer to peer exchange, Localbitcoins.
A lot more trading happens in centralized exchanges, but they tend to be located in neighboring countries where Venezuelans trade in Colombian Pesos or Brazilian Real, making estimates difficult.
While the peer to peer nature of Localbitcoins may allow it to bypass fiat restrictions, providing a peak into bitcoin adoption across Latin America.
Trading volumes are up in Colombia, where 640 bitcoin exchanged hands. There’s a slight premium of about $100 on Cryptonex, which handled $2.5 million on the BTC/COP trading pair.
The same premium applies for Brazilian money where $5.3 million was traded on just the Cryptonex exchange in the past 24 hours.
It is Venezuela, however, that has seen the most significant increase, with bitcoin trading volumes up by 4x since summer 2018 from circa 500 BTC to now 2,000.
The primary reason is probably because Venezuelan money has fully collapsed, with inflation reaching more than one million percent.
The country is under sanctions, potentially making it difficult to move fiat in and out. There’s also reports of Venezuelan authorities seizing gold or cash. So making bitcoin an option to bypass sanctions or to minimize the chances of the assets being seized.
The latest example where bitcoin could play a role has come today with Nicolás Maduro, the contested president of Venezuela, blocking a humanitarian aid shipment.
He claimed the aid shipment was a frontrunner to a US-led invasion, stating that “no one will enter, not one invading soldier.”
While Juan Guaidó, who claims he is the actin president of Venezuela as he considers Maduro’s presidency to be illegitimate, was supported by a lawmaker Miguel Pizarro who in a message to the military said:
“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.”
Bitcoin could potentially assist in bringing in raw resources from the outside in small amounts by paying directly individual Venezuelans near the border who could then send in small amounts of food or medicine from neighboring countries.
As bitcoin is outside of the banking system and can’t be blocked, many cryptonians have directly donated cryptocurrency to Venezuelans and Venezuelan grassroots charities, with that crypto then feeding numerous families.
That has considerably increased crypto awareness in the country, with trading volumes reflecting growing adoption in what was once the richest nation in Latin America.
How this situation will be resolved remains unclear, with rumors Russia is beginning to worry Maduro might lose his grip on power.
The challenges are immense whoever runs the country as they owe significant sums to Russia and even more to China while GDP has fallen by 50%.
USA has now imposed sanctions on oil too, cutting further any potential revenue sources, with millions of refugees escaping to neighboring countries.
Bitcoin adoption therefore might continue to rise, with trading volumes spiking after Guaido’s challenge for the presidency, so reaching now all time high.