Venezuela Sets LocalBitcoins Ablaze amid Demand for Sound Currency
Crisis-racked Venezuela has been a leader in cheap mining, and trading Bitcoin through the OTC service is a way to get to a more stable currency.
Venezuela keeps beating its own records on LocalBitcoins, one of the most popular over-the-counter (OTC) services for trading digital assets. Other Latin American countries are also showing surges of activity, as per data from CoinDance. The entire region has turned to this type of OTC trading, which is an alternative to exchanges.
There are multiple reasons behind the demand for digital assets in Venezuela. The instability of the bolivar, which has lost most of its value and purchasing power, is forcing locals to turn to digital asset trading. The other reason is that it only costs $531 to mine 1 Bitcoin (BTC) in Venezuela due to the combination of inflation, low-cost electricity, and the general chaos in the country.
The region is showing increased adoption of digital assets due to more lax regulations.
Other countries with recent spikes in LocalBitcoin activity include Chile, Colombia, Peru, and Mexico. They have displaced previous leaders such as China, where the usage of LocalBitcoins declined.
With inflation in Venezuela reaching four-digit percentage figures, even the Bitcoin bear market did not hurt demand for digital assets. Fiat currency depreciation in times of crisis is somewhat similar to the loss of value for digital assets, but the latter may be easier to exchange for international currencies.
Venezuela has attempted to monitor and regulate the usage of cryptocurrency. Additionally, the country is still trying to launch the Petro - a national digital coin that has been in the works for a few months now. But after being offered in a pre-sale last March, the actual asset has not been discovered. There is no information on the platform used to issue the Petro and no exchange trading.
It is yet unknown if the new industry body, Sunacrip, will be able to monitor LocalBitcoins. The regulations put in place aim to boost the performance of the Petro and will affect exchanges, miners, and other related entities.