As Venezuela’s economy continues its death spiral, locals are trying to get as much capital as they can into Bitcoin, which despite its current downtrend isn’t declining as quickly as the Bolivar.
At this moment, one satoshi (0.00000001 BTC) is worth about six Bolivars, making the price of Bitcoin roughly 600,000,000 VEF. This value is rising at such a rate that we are certain that Bitcoin will be worth more after we have published this piece.
A quick look at Coin Dance shows us that the activity from Venezuelans at Localbitcoins—a marketplace where individuals sell and buy Bitcoin without exchanges—spiked at an astonishing rate, with volumes reaching 3,870,000,000,000 Bolivars last week.
Reaching trillions in trade volume is normally a good thing, but this chart is only showing these numbers because of the sheer amount of inflation that Venezuela’s economy is undergoing.
Looking at the country’s historical inflation rate for this year, we can correlate it almost perfectly to the earlier chart.
This data clearly shows us that the mass purchasing of Bitcoin is a cry for help from citizens who have no other viable way to store their wealth.
All this is happening despite the fact that Venezuelan President Nicolas Maduro announced the sale of $5 billion in Petro tokens. It bears asking where the money went, as the country’s economy is tanking harder with each month that passes.
Last month, Maduro issued a statement to Cuatro F—a megaphone for the ruling party—saying that Venezuela would be a “gringo” colony if Henry Falcon, the opposition leader, is elected, perhaps fearing that the man would undo his efforts to pump up the Petro.
Still, one question remains: Why aren’t people in Venezuela seeking refuge in this new cryptocurrency and are instead opting to purchase Bitcoin in droves to escape the hyperinflation of the Bolivar?