Venezuelan economic crisis is one of the most gruesome ones in modern history. The country is about to witness an inflation rate running in millions. Sad, but not for crypto trade. The ailing Latin American nation has just broken the record for weekly Bitcoin trade. For seven days, between 9 to 15 June, Bitcoin was traded for over 46 billion Venezuelan Bolivars (VES), breaking the previous record of 40 billion VES.
The hyperinflation prevailing in the country has made people lose faith in traditional currencies for storing their wealth. This has made them to look for a stable alternative, and Bitcoin seems a potent and lucrative option. Moreover, a large number of techies in the country have taken up crypto mining, which pays them in currencies other than VES or Petro.
Cryptocurrencies in general and Bitcoins, in particular, have the potential to tackle the economic crisis, which is a result of government-controlled currency malpractices, and sanctions imposed by Washington. Since Bitcoin is a decentralized currency, its value doesn’t get affected by government sanctions or any other regulated hindrances. Also, Bitcoin has much more liquidity than gold or other traditional assets, as it is acceptable in a large number of countries. All of these factors make it an obvious choice in a country which is expecting annual hyperinflation at the rate of a mind-numbing 8 million percent.
South America is poised for a big crypto boom, though a major player in the region, Brazil, has shown hostility in the past few weeks. The newly elected President, right-wing politician Jair Bolsonaro recently canceled a multi-million dollar project focused on the development of crypto industry, for integrating native Indian population which uses digital currencies.
However, other major Latin countries like Argentina have shown positive intent and a progressive approach towards the industry. With growing resentment for the sanctions on South America by the US and its allies will further push them for crypto adoption. This is also one of the reasons why some US Congress Representatives want a blanket ban on the use of digital currencies in the United States.