Argentina and Venezuela Bitcoin Purchases Skyrocket amid Crypto Market Collapse
Recently, bitcoin trading volumes have skyrocketed in Argentina and Venezuela, according to LocalBitcoins stats.
The Bitcoin trading volumes in Venezuela have recently surged and set new records, as shown by data from LocalBitcoins, a P-2-P crypto trading platform. Moreover, the statics reveal a rapid increase of the exchange's trading volume in other South American countries like Argentina and Peru.
According to insights from Localbitcoins compiled by Coin Dance, a data monitoring service, South America proved to be the fastest growing region in terms of Bitcoin trading volume. This is especially true for Venezuela.
In October, Venezuela already recorded an all-time trading high, but in the last three weeks, three new consecutive record highs were reached. As a result, in less than a month the growth of Bitcoin trading volume in Venezuela totaled about 37%. Similarly, Argentina registered the highest number of Bitcoins transactions in more than a year.
Buying the dip
The most obvious explanation for this is the current bear crypto market. As the Bitcoin price collapses to new year-lows, more willing buyers are emerging to buy it on dips. However, it might be not that simple. It is not a mere coincidence that both Venezuela and Argentina have also surged in the amount of fiat currencies recently converted into Bitcoins.
People in both countries are taking a growing interest in Bitcoin purchases amid devastating economic and currency crises. In Venezuela, inflation has increased this year by almost 200,000%, while by the year-end it is expected to reach one million percent, according to the IMF.
Meanwhile, the national currency has plunged by about 95%. In Argentina, the economic situation is not so spine-chilling, though inflation growth there will probably reach 40% by the end of the year, and its peso has lost more than half of its value this year.
As a result, Latin Americans find it extremely difficult to secure their wealth from disastrous currency devaluation considering the severe restrictions on capital outflow in these countries. This forces them to turn to digital assets as an alternative way to store value, which might be the primary driver of their keen demand for Bitcoin. Accordingly, the current low BTC price makes it available now for more buyers who could not afford it otherwise.
The lesser of two evils
It is possible that people purchasing Bitcoin in Venezuela or Argentina are not searching for quick profits or higher transaction speed - all they want is to protect their money from hyperinflation. This proves how potentially helpful Bitcoin can be in crisis-stricken countries where national currencies don't serve as a store of value and governments don't protect their citizens.
Anyway, no matter how volatile cryptocurrencies are, their volatility and the extent of their slump this year still can't beat what is happening now in Venezuela.