[2019-08-06] Venezuela Bitcoin Trading Hits New Highs Amid US Embargo

[Jgilpulg]

Bitcoin price is currently trading at almost a $1000 premium in VES on P2P trading platform, Localbitcoins, and trading volumes have skyrocketed to record-breaking highs.

https://bitcoinist.com/venezuela-bitcoin-trading-hits-new-highs-after-us-embargo/

[Kemarit]

As far as I know, bitcoin trading in Venezuela has been hitting records high like every week. So I don't know why the OP is surprise with this kind of news.

And Venezuelan's has been seeking refuge to bitcoin ever since the economic turmoils and embargo. Hyperinflation? You can go to Venezuela and see it for your self. 

[Slow death]

And how long did the people of venezuela use bitcoin as a refuge? Will use bitcoin as a refuge for a year? for 10 years? forever? Venezuelan people should stop supporting Maduro. they should ask for fair and transparent elections, they must demand democracy and freedom of expression. They cannot continue to accept the kind of life they have

[stompix]

As far as I know, bitcoin trading in Venezuela has been hitting records high like every week. So I don't know why the OP is surprise with this kind of news.

It is hitting record high when you count it in bolivars..
But, surprisingly, when it comes to $, the volume is suspiciously linear.

Look at this:
https://coin.dance/volume/localbitcoins/VES/BTC

It hovers at around 400-500 just like it did in march may last year when the price was the same.
It more than tripled in January March when the bitcoin valued dropped...when around ~ 4 times from now.
And the lowest volume in BTC terms was..again really suspicious exactly when the price as above 15k.

This is really intriguing, seems like there is somebody behind those volumes that either brings in $ or is seeling something that has a constant value in $

[joelsamuya]

And how long did the people of venezuela use bitcoin as a refuge? Will use bitcoin as a refuge for a year? for 10 years? forever? Venezuelan people should stop supporting Maduro. they should ask for fair and transparent elections, they must demand democracy and freedom of expression. They cannot continue to accept the kind of life they have

My country was once under a dictatorial regime and honestly it was not so easy to get away from someone and his minions who wanted to stay on power as possible as they can and who are so willing to do anything even unthinkable so they can't be kicked out of office even if the people (or majority of) do not like them anymore. I am sure this is the same with Venezuela.

Now wonder there is a growing interest with Bitcoin in this country as its economy is now collapsing and the value of its national currency remains to be almost worthless. Of course, it does not mean that a majority of Venezuelans have access to Bitcoin but at least there can be a choice for the many if they want to. And yes, Bitcoin is not the solution but for the whole country to decide once and for all that they want the change in the leadership and the direction of the country. I am hoping that can happen soon.

[bryant.coleman]

I am not sure for how long the Venezuelan government will tolerate the Bitcoin trading in its territory. The national currency is losing value every day and people are using Bitcoin as a store of value (which further weakens the national currency). The good news is that I haven't heard of anyone getting arrested in Venezuela for using BTC or any other cryptocurrency.

Don't think that the Venezuelan government has become Bitcoin friendly all of a sudden. If they are tolerating BTC, then there is some solid reason behind it. The ongoing sanctions and embargoes have cut the flow of foreign currency to the country. The government may be using Bitcoin to circumvent these sanctions and bring in foreign currency.

[1Referee]

I am not sure for how long the Venezuelan government will tolerate the Bitcoin trading in its territory.

The volumes are still 'just' $5 million per week at their peak, so it might not be totally a threat yet for the government, and we don't know how much of this volume consists of speculation to benefit from the fluctuations. You still need Bolivars or dollars to buy food, pay bills, etc.

The national currency is losing value every day and people are using Bitcoin as a store of value (which further weakens the national currency).

Mind explaining how people using Bitcoin as store of value weakens their national currency further? For every person buying Bitcoin with Bolivars, there is someone accepting it. It's not that the "utility" of the Bolivar declines because that would require people to no longer accept Bolivars for their Bitcoins, which isn't the case yet.

[Saint-loup]

As far as I know, bitcoin trading in Venezuela has been hitting records high like every week. So I don't know why the OP is surprise with this kind of news.

It is hitting record high when you count it in bolivars..
But, surprisingly, when it comes to $, the volume is suspiciously linear.

Look at this:
https://coin.dance/volume/localbitcoins/VES/BTC

It hovers at around 400-500 just like it did in march may last year when the price was the same.
It more than tripled in January March when the bitcoin valued dropped...when around ~ 4 times from now.
And the lowest volume in BTC terms was..again really suspicious exactly when the price as above 15k.

This is really intriguing, seems like there is somebody behind those volumes that either brings in $ or is seeling something that has a constant value in $

Maybe the needs of the population remain stable. And since a kilogram of rice keeps the same price in US$, it doesn't seem extravagant that the whole volume in US$ of the market remains the same IMO. Unfortunately prices of commodities are fixed in US$ in the world.

[roosbit]

-zips-

Maybe the needs of the population remain stable. And since a kilogram of rice keeps the same price in US$, it doesn't seem extravagant that the whole volume in US$ of the market remains the same IMO. Unfortunately prices of commodities are fixed in US$ in the world.

Taking prices of commodities on a global scale to be fixed, I don't think so, this is also a wrong scale !

There are so many factors influencing these prices such as the political factors, trade war, currency power and generally the demand of the commodities and it's impossible to have a fixed/uniform market price everywhere afaik.

[cr1776]

As far as I know, bitcoin trading in Venezuela has been hitting records high like every week. So I don't know why the OP is surprise with this kind of news.

And Venezuelan's has been seeking refuge to bitcoin ever since the economic turmoils and embargo. Hyperinflation? You can go to Venezuela and see it for your self. 

The people of Hong Kong should be buying bitcoin now because turmoil is headed their way just as it was in the later 1990s in Venezuela.  The smart ones should be preparing.

[Ozero]

I am not sure for how long the Venezuelan government will tolerate the Bitcoin trading in its territory. The national currency is losing value every day and people are using Bitcoin as a store of value (which further weakens the national currency). The good news is that I haven't heard of anyone getting arrested in Venezuela for using BTC or any other cryptocurrency.

Don't think that the Venezuelan government has become Bitcoin friendly all of a sudden. If they are tolerating BTC, then there is some solid reason behind it. The ongoing sanctions and embargoes have cut the flow of foreign currency to the country. The government may be using Bitcoin to circumvent these sanctions and bring in foreign currency.

Since the beginning of this year, inflation in Venezuela has reached 1600 percent. Of course, the inhabitants of this country are forced to hide their savings in bitcoin, which is not subject to inflation. However, in this country, first of all, it is necessary to solve the protracted crisis of political power, and then to solve their economic problems. The longer it drags in time, the harder it will be to get out of this very difficult situation.

[BitHodler]

The people of Hong Kong should be buying bitcoin now because turmoil is headed their way just as it was in the later 1990s in Venezuela.  The smart ones should be preparing.

They should have bought Bitcoin years ago already-- the relation between Hong Kong and mainland China has always been a sensitive issue that was on the brink of erupting into mass protests and whatnot.

I however think that the more likely scenario is that people (even some of the smart ones) will wait for things to escalate into a way more serious problem. This is how it has always been in shaky countries.

Even if people aren't too familiar with Bitcoin, gold is an option too, or us dollars. I would say that us dollars are the more likely option to go for because it's the easiest asset to obtain and way more people accept it as form of payment.

[bbc.reporter]

How much of the total of bitcoin's volume did Venezuela contribute for this year? Is it enough to pump bitcoin from $3k to $12k hehehe?

[bryant.coleman]

I am not sure for how long the Venezuelan government will tolerate the Bitcoin trading in its territory. The national currency is losing value every day and people are using Bitcoin as a store of value (which further weakens the national currency). The good news is that I haven't heard of anyone getting arrested in Venezuela for using BTC or any other cryptocurrency.

Don't think that the Venezuelan government has become Bitcoin friendly all of a sudden. If they are tolerating BTC, then there is some solid reason behind it. The ongoing sanctions and embargoes have cut the flow of foreign currency to the country. The government may be using Bitcoin to circumvent these sanctions and bring in foreign currency.

Since the beginning of this year, inflation in Venezuela has reached 1600 percent. Of course, the inhabitants of this country are forced to hide their savings in bitcoin, which is not subject to inflation. However, in this country, first of all, it is necessary to solve the protracted crisis of political power, and then to solve their economic problems. The longer it drags in time, the harder it will be to get out of this very difficult situation.

Well, if you ask me, there is practically no quick solution to the political crisis. The country is essentially divided in to two polar opposite camps, with one of them supporting Nicolás Maduro and the other one supporting Juan Guaidó. Both these camps have roughly 50% backing each from the general public, which means that the political crisis can't be resolved by the use of force.

Now let's examine the root cause behind the crisis. When the crude prices were high, there was enough money in Venezuela for the welfare campaigns, even after a large part of the revenue getting lost to corruption and largesse. But now the crude prices are down by 50% and the profits of Petróleos de Venezuela are down by more than 90%.

So either they should reduce the wasteful spending (corruption.etc), or they should wait for the crude prices to hit $120 per barrel once more.

[hugeblack]

Bitcoin price is currently trading at almost a $1000 premium in VES on P2P trading platform, Localbitcoins, and trading volumes have skyrocketed to record-breaking highs.

I think it's more about inflation than about cryptocurrencies? This has happened in Turkey and Iran, where the local currency has collapsed, causing Bitcoin to rise madly, against the dollar's rise to the local currency.
If I am in their place, I may venture a lot of currencies (crypto or safe paper money) as the political impact will lead to more and more inflation and thus erode the value of the local currency.

[7788bitcoin]

And how long did the people of venezuela use bitcoin as a refuge? Will use bitcoin as a refuge for a year? for 10 years? forever?

That is the sad thing about them, they have no choice and the current turmoil started well back because of the bad policies and governance as well as corruption of Hugo Chávez and it continued during the period of Nicolás Maduro too and they are not taking any economic decisions that could change their current issue rather it looks like they are trying to hold onto their positions forever.

Venezuelan people should stop supporting Maduro. they should ask for fair and transparent elections, they must demand democracy and freedom of expression. They cannot continue to accept the kind of life they have

I doubt whether they have a leader who could change the issues at hand and the people might have lost their faith in all the political parties and if that happens you cannot expect a fair election. The issues and the rippling effect they had on their economies because of bad governance and decision making are a big lesson for all the countries.

[sunsilk]

The good news is that I haven't heard of anyone getting arrested in Venezuela for using BTC or any other cryptocurrency.

I've watched a documentary about this before and it seems that bitcoin mining was treated illegal there if the person who do it isn't registered. The person who was interviewed said that the police were raiding them and has arrested some locals.

I'm uncertain if this was the interview but made in article.

Extortion, Police Raids and Secrecy: Inside The Venezuelan Bitcoin Mining World

[timerland]

I always love reading articles about the Venezuela people using bitcoin as one of their main currencies, it really reflected the true value of bitcoin and it's the ability to provide financial stability to a lot of people, even if the currency is quite volatile compared to other fiat currencies.

Don't be so lax with the government though, they aren't fully comfortable with cryptocurrencies, but more so tolerating and dealing with BTC as a solution for now, before they are able to fix things.

I am not sure for how long the Venezuelan government will tolerate the Bitcoin trading in its territory.

The volumes are still 'just' $5 million per week at their peak, so it might not be totally a threat yet for the government, and we don't know how much of this volume consists of speculation to benefit from the fluctuations. You still need Bolivars or dollars to buy food, pay bills, etc.

I agree. I'd like to see more clarification on what this money equals though, how many people hold BTC, etc. This will be a great case study for the generations to come, for sure.

[bbc.reporter]

@timerland. Agreed. However, I reckon the government of Venezuela and others might only be tolerating it because they do not have the laws and the means to enforce regulations. The moment they do figure it out, let us hope adoption gas spread deep and wide and it would be too late for them hehehe.

[BitHodler]

However, I reckon the government of Venezuela and others might only be tolerating it because they do not have the laws and the means to enforce regulations. The moment they do figure it out, let us hope adoption gas spread deep and wide and it would be too late for them hehehe.

It doesn't require much effort from the side of the government to introduce such laws. There will always be a larger group of the inhabitants that will then not deal with Bitcoin because they're too afraid of the consequences.

The government can choose to softly enforce these laws by jailing a few people left and right every now and then to signal that they are actively chasing after those who break the law. Pretty effective measure if you think about it.

It's probably more related to them wanting to create a 'friendly' crypto environment for their own Petro to thrive one day. It's not something we read a lot about nowadays, but it can't just have magically vanished.