In Argentina and Venezuela Bitcoin as a solution to inflation.
Crypto

In Argentina and Venezuela Bitcoin as a solution to inflation.

By Federico Izzi - 24 Sep 2018

Chevron down

According to the latest report by DIAR, a company that deals with financial research and that has recently also been dealing with crypto and blockchain, in Venezuela bitcoin continues to find more and more fans.

The yardstick is obviously bitcoin, although the adoption of Dash and Monero as cryptocurrencies that provide more privacy to all users is increasingly growing as well.

According to DIAR, in Venezuela cryptocurrencies are not only used as a store of value but also as a means of exchange and payments on a daily basis.

The phenomenon is not only limited to Venezuela but has also been documented in Argentina, another Latin American country where inflation has risen by 35%.

In addition, an Argentine political party, the Partito de la Red, has announced on Twitter the proposal to buy BTC with 1% of the reserves of the Central Bank of Argentina.

Cryptocurrencies are on the rise

To better understand what figures we are talking about, we can take as a reference the Local Bitcoins charts used in the DIAR research.

Argentina and Venezuela are using crypto to preserve the value of the currency, since the bolivar has hyperinflated as much as 200 thousand % and, according to some recent studies conducted by the International Monetary Fund, by the end of the year will reach 1 million %.

Despite the fact that a month ago the country has lowered inflation by 5 zeros, inflation has increased by 100%. In Venezuela bitcoin is increasingly becoming a way to save money. In some countries, Bitcoin’s volatility would be less a problem than the rise in inflation.

In the above chart, DIAR applied the exchange rate in dollars to give a clearer picture of the situation. The graphs look at a period beginning in 2016, i.e. from the moment of vertical growth-inflation.

This is certainly a very delicate time for Venezuela. If it is true that by the end of the year inflation will reach the levels of 1 million %, this would be a situation comparable only to the 1920 crisis in Germany.

According to the Venezuelan volumes reported by Local Bitcoins, the use of cryptocurrencies has increased from 2016 to date by 1250%, reaching 3 million dollars.

Federico Izzi
Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & Assob.it partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa Diretta.tv and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. Since May 2017 he is officially a Bigbit technical analyst. He was interviewed as a #cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on #Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

We use cookies to make sure you can have the best experience on our site. If you continue to use this site we will assume that you are happy with it.