Bitcoin Forum

What is even more remarkable is the price people are willing to pay per bitcoin. Given the current global market value of $7,145, one would not necessarily expect there to be a high premium in Venezuela. Things could not be further from the truth, however, as the current premium to be paid on top of the average bitcoin price is very steep.

https://fintoism.com/news/bitcoin-prices-in-venezuela-near-9500-as-btc-demand-intensifies/

It is a very unfortunate and unacceptable situation that a people to be suffering because of a mentally ill person. the president of venezuela Is a mentally ill I wonder: Can people in venezuela not use paypal and other sites to buy bitcoin at the fair market price?


that's why I ask if they can't buy bitcoin using paypal on other sites

You need to have some account in the bank to verify your PayPal, and to do that you need to have some money. I doubt that people in Venezuela have money to invest in Bitcoin, at least not ordinary people who earn $5-6 per month. Consequently, the price of Bitcoin in Venezuela is not that important either, because it is a very small market where mostly the rich buy. Also, PayPal is not a payment processor with which it is desirable to buy Bitcoin because of its policy towards cryptocurrency, and the fact that is very easy to lost money in case seller decides to play dishonest.

This is really insane but i guess the government can't do much about it either. Venezuela has been in peril  times for quite sometime now and i don't think this are going to get any better soon. But i don't get why someone would purchase bitcoin at such a high price when it is relatively cheaper on so many exchanges. I have quite a number of friends over there through the internet and they tell me how life is very difficult over there.

Is the reason due to the high demand for Bitcoin in that country? Or because there is more than one exchange rate?
I remember that it happened in Iran because there are two exchange rates in that country, which caused the price to be much more than the official rate in the country.

Generally, a simple person will not have the possibility to exploit this difference, Bitcoin will be a much better investment than buying a dollar or owning a land "traditional money preservation."

One of the many things I realized with Bitcoin is that it can be thriving well and will be so valuable whenever people are experiencing myriad of difficulties and a country is having many big turmoils. In other words, when times are bad and people can be suffering, Bitcoin can be good. And this is quite illustrated in the country of Venezuela. However, this is truly sad and unfortunate. When there is that big demand and the supply is getting harder to flow in a free market, then the asset will certainly be getting a more-than-usual price.

I do not agree. The high premium should be expected in a sanctioned country similar to Venezuela or Iran that are suffering from hyperinflation. Also check the exchange rates for the American dollar and euros in those countries and see how they are also given premium rates.

This is not isolated to bitcoin only.

Wow, hope we reach it soon too.. We can't even get to $8,000 mark. Their currency is getting worthless as inflation rate there is getting higher and higher. So no wonder if they stick to Bitcoin rather than banks there.

Venezuela for sure has become like a "model" when it comes to use and adoption of Bitcoin with the people all because they are seeing Bitcoin as a good tool to help them survive the everyday harshness of the country's political and economic realities. Life in Venezuela can never be easy and so to help them buy some of the important stuffs to survive they are using Bitcoin as the country's national money is suffering from the well-known hyperinflation. Because there is that high demand, the price is getting to be higher than what we usually pay outside of that country.

Its actually not about the people of Venezuela not willing to use PayPal to buy bitcoins but the issue is about the company PayPal if it will allow users to use its platform to buy bitcoin. Yes several people have used PayPal to buy bitcoin but at the same time we seen numerous people gets their account locked, faced reversal of transactions for using PayPal to either pay for bitcoin they want to sell or even to pay for bitcoin they want to buy.

Venezuela is currently facing some economic challenge which can explain the increase in the value of bitcoin but no one should be fooled because the event is localised and its not expected to spread to the entire crypto market.

If in reality you can buy USD in Venezuela for a price that is higher than the official rate, then maybe when talking about how much is BTC in Venezuela we should take the real price into account?

I have an impression that in articles regarding the Bitcoin price in those countries with hyperinflation they are always making the same mistake: they take the current price of BTC in local currency and then divide it by the official exchange rate of that currency to USD. If they were using the real exchange rate instead of the official one for their calculations, maybe they'd get the same USD/BTC rate as anywhere else.

Correct. The thing however with these premiums in Bitcoin price is that they are not allowing anyone with a couple of coins to sell to actually get that price. What you have to do is split every coin in 10 or 20 pieces and sell those pieces seperately, otherwise you are flooding the availability of coins on that day. There is no liquidity in any of these problematic countries.

I remember having read an article about how illiquid the market in Iran was, while people on social media celebrated that Bitcoin's popularity in that country was soaring. It's impossible to have fair price discovery like that, which people should understand. People follow the headline hype but don't look further into what's actually happening in these countries.

The difference in this case is that Bitcoin is more of a niche type of retail market, while the dollar and some other fiat currencies are more professionally traded. In these countries foreign fiat currencies have been in-demand for decades and for that reason have a much more matured market.

I do not know who or how the rates are calculated in Venezuela, however, what I know is these types of articles are clickbait. Should we be happy that you can sell your bitcoin for a higher rate in a sanctioned country with hyperinflation?

@1Referee. Agreed. However, there are always some people who never question anything hehehe.

Idk, I think it would be interesting information if it were true. I mean 33% difference in price for BTC between Venezuela and the rest of the world could be something I personally wouldn't ignore, even if it were a sanctioned country with hyperinflation, like you said. But the thing is that it's most likely not true. They simply calculated the rate in the way I described in my previous post.

I don't think it's remarkable. Demand is high and supply low on those exchanges so the price gets pumped up and people have to pay premium. It used to be like that on Korean exchanges when they had low liquidity years ago.

 It's a good arbitrage opportunity and that's all. It won't affect global prices because volume is too low in Venezuela.

Will you accept Venezuela's currency for payment or American dollars?  How much did those Venezualans pay for American dollars? Also much above the regular rate, I reckon. American dollars demand intensifies.

If someone is interested in arbitration in Venezuela, write in messages.

Its not because of demand and supply, its because of lack of fair access to bitcoin trading market. On 15 Dec 2019 (date of this post), price of bitcoin was 7100$ while in Venezuela its $9500 on that day. If people in Venezuela  have access to large exchanges like coinbase, they would have easily bought at 7100$.

That's what comes to mind first, but consider the following. If people in Venezuela were going to exchange USD for BTC they would find a way to do that, for sure. But the thing is that they want to exchange Venezuelan Bolivar for BTC, and no one wants that currency even in Venezuela, let alone the rest of the world. So, they are compelled to do the exchange within the country, but, imo, even this fact doesn't explain the ridiculous price. The $9,500 is the result of wrong calculations: they take the VEF/BTC rate on Venezuelan exchanges, and then derive USD/BTC rate from that, using the wrong (read "official") USD/VEF rate.

wrong ,it is exactly because of supply and demand , supply is less than demand , hence the price
all the rest is just the consequences of that , including limited access to trading platforms and volatility of their national currency
I just watched a TV episode , filmed in Caracos a couple of months ago
a guy , an expatriate is living there and describes how his life is
it is really diffuclt to live in Venezuela , ques everywhere , exchange rate is different in the morning and in the evening , toilet paper considered luxury
so it is not surprising to me that people do not trust bolivar and are trying to save whatever is left of their money in crypto
although I'm not sure why don't they use international online exchangers ( not exchanges) their rate is atrocious , but not 9000$ , nowhere near it , actually

I think it still counts as law of supply and demand. The demand is high but the supply or the fair access as you mentioned for the market is low that's why they are at the premium price now. Some people there probably have internet connection and they can easily access to the web and trade as much as they want but their money is becoming useless due to the hyperinflation.

Calculating the venezuelan bolivar they have wouldn't count that much even if they want to buy bitcoin because the exchange rate for $9,500 of bitcoin is with (USD/BTC) and you might barely find someone who's willing to trade their btc's for bolivar. I think there are few wise folks there that are making this is as an opportunity to arbitrage but don't want to be exposed as they might get tracked down. I don't know the policies there currently but there's a tendency that it's like that.

The word sanction was been used way too lightly in this thread. In the bigger picture yes it's all about "demand and supply" but what most people are missing here is that Bringing money out of a "sanctioned country" isn't easy. You are basically betting on ease of the sanctions placed on the country or you will have to smuggle cash out... That's where the 33% premium is coming from.  If you think you can do it! Go ahead that 33% Gain is waiting for you... But it's easier said than done...

There is a reason behind that. The price reflects supply and demand on the free market.

And with a closed currency system like Venezuela that is currently experiencing significant turmoil I would be surprised if BTC wasn't traded as a premium in their domestic bounds. There is simply too much benefit to holding BTC in terms of being a hedge and a source of liquidity for personal investors to be willing to give up easily for worthless, hyperinflated bolivars.

Maduro's Petro clearly hasn't addressed this need either because Venezuelans recognize that it's just a publicity ploy.

bitcoin is solution for "Bankrupt Country" and every country that is the enemy of the US will use bitcoi as currency.
now we know iran already use it, and the price of bitcoin is very expensivet, if we compare with kraken and bittrex.

Yep, but sadly Blockstream made them pay decent fees. BTC is the wrong electronic cash

This overpricing is driven by an unhealthy economy

There is so much demand because ordinary Venezuelans want to keep their wealth secure. Ironically, they are forced to use a volatile asset such as Bitcoin as the store of value, as other popular options such as gold, United States Dollar.etc are in short supply. That said, I hope that they won't face any problem in the future, when they want to cash out their coin holdings.

State regulation in Venezuela has its own specifics that affect on prices

are they crazy in venezuela? Who buys bitcoin at 13k?   reddit note:

https://www.reddit.com/r/Bitcoin/comments/gvzawa/meanwhile_in_venezuela/