This morning, a political scandal in Zimbabwe has placed the economy in a highly volatile situation, forcing Bitcoin merchants to sell the cryptocurrency at almost double its original price.
Zimbabwean President Robert Mugabe fired his deputy, Emmerson Mnangagwa, yesterday after his wife—Grace Mugabe—was booed by Mnangagwa’s supporters during rallies.
Although this move may seem like a routine firing, we should keep in mind that Mnangagwa was thought to be Mugabe’s eventual successor. Now that it looks as though his wife will instead take the ousted deputy’s place, Zimbabwe is once again in disarray.
Because of the political climate in the country, the economy has grown unstable, making people even warier about the value of foreign currencies.
Zimbabwe’s only exchange—Golix.io—has opened trading today at $13,100 for one Bitcoin as the “official” price hovers around $7000.
Bitcoin is not the only currency to experience this premium in the country. The U.S. dollar is also trading at 62% higher, on average, than its regular price.
It is becoming more of a challenge to purchase foreign currencies inside the country, leaving many to opt for potentially shady intermediaries that sell foreign money at prices much higher than their market rates.
Because of its recent price surge, Bitcoin has grown in popularity in Zimbabwe. Investors are purchasing as much of it as they can in the hope of eventually leaving the country due to the political tensions that have sprung as a result of the ousting of the President’s deputy.
When political turmoil arises in a country, there’s always a cryptocurrency to turn to.
Like Zimbabwe, Venezuela has had its recent share of political turmoil and economic woes. The country is also turning to cryptocurrency as a stopgap to the massive inflation that is happening within its borders.
We’ll just have to see how the eventual SegWit2x hard fork influences Bitcoin’s value as its launch date approaches in the middle of this month.
Today, the blockchain’s hash rate almost halved ahead of the fork. If this causes a significant drop in Bitcoin’s value, then purchasing it in Zimbabwe for $13,000 today will not have been a good idea in retrospect!