Bitcoin trading in Venezuela is hitting record levels. As bitcoin trading in Venezuela and around the globe is on the rise, the economy in Venezuela is collapsing. Could this be part of the reason why the price of bitcoin is rising to new highs this year?
“What our country is going through is monstrously unique: It’s nothing less than the collapse of a large, wealthy, seemingly modern, seemingly democratic nation just a few hours’ flight from the United States,” wrote The Atlantic.
It’s being speculated that part of the rise in the price of bitcoin is due to capital flight in Venezuela. People in the country which is in such turmoil are desperate to get any value out of the country. Bitcoin being used as a means of capital flight is not unheard of, and is actually, a really good vehicle for it.
BTCC CEO Bobby Lee says there are a lot of people in China using capital flight as a means to move their money out of China to secure their funds in other currencies overseas. People in Venezuela may be doing the exact same thing. On Bloomberg’s “Deep Dive” last week, they also cited that the possible spike in price may be due to the economic collapse in Venezuela.
If you look at charts for bitcoin trades in Bolivars (VEF), you can see a huge uptick in volume over the past few months. Take for example this chart, which shows a the spike in volume.
On Coin.Dance, the chart doesn’t look much different. Look at the increase in exchange volume.
There is clearly a high demand for bitcoin in Venezeula. And just this week, a new bitcoin exchange has opened in Venezuela, which looks to tap into some of this volume.
YaBit is a bitcoin exchange based in Venezuela which allows users to buy and sell bitcoin using their online platform. Users can fund their accounts with a bank transfer or bank deposit in Venezuelan Bolivars.
The exchange just opened so it’s not clear yet on the volume they will receive, but another exchange which has been already operating in Venezuela is SurBitcoin. However, they’ve been seen some problems recently which has led to speculation on their status.
There are many possible factors to the rise in the price of bitcoin, and it’s nearly impossible to pinpoint it only a single event. But it’s clear that Venezuela is contributing to it in some ways.