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Venezuela: shocking crash of the bolivar exchange rate against bitcoin
Venezuela: shocking crash of the bolivar exchange rate against bitcoin
Crypto

Venezuela: shocking crash of the bolivar exchange rate against bitcoin

By Marco Cavicchioli - 2 Sep 2019

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In the last seven days, the value of the Venezuelan bolivar exchange rate against bitcoin has fallen by 30%. 

The figures refer to the trading on LocalBitcoins in Venezuela. During the week ending August 31st, 2019, there was a record high in the number of bolivars traded against bitcoin: over 114 billion. 

The previous week the figure was slightly more than 77 billion, however, the most surprising change concerns the exchange rate. 

venezuela bolivar exchange bitcoin

During the week just ended, in order to buy only one BTC on LocalBitcoins, it took on average about 215 million bolivars. Whereas the previous week, 166 million bolivars sufficed, which means that in just seven days the exchange rate of the Venezuelan bolivar against bitcoin fell by almost 30%. 

It should be noted that, in the same period, the value of BTC in dollars fell from more than $10,000 to about $9,500, thus the collapse of the bolivar can not be attributed to an increase in the value of bitcoin. 

In addition, in early 2019 just under 4 million bolivars were enough to buy one BTC, so in the past eight months, the Venezuelan national currency has lost more than 5,000% against bitcoin. 

However, during the same period, the value of bitcoin in dollars rose from just under $4,000 to $9,500, which means the value more than doubled. 

This in no way diminishes the fact that the loss of value of the Venezuelan bolivar against bitcoin over the course of this year is simply frightening. 

The reason for this collapse is the hyper-inflationary spiral in the country, which not even the Petro has been able to stop. 

In fact, the Venezuelan state cryptocurrency seems to have had an insignificant impact on the country’s devastated finances so far, whereas the race to buy bitcoin continues.

Venezuela remains the second-largest country in the world for BTC trading volumes on LocalBitcoins, preceded only by Russia but ahead, for example, of the US. 

Moreover, in fourth position after the US but before the Eurozone, there is Colombia, a state bordering Venezuela where hundreds of thousands of Venezuelan refugees fleeing the country are finding protection and shelter. 

South America is increasingly proving to be one of the places in the world where the interest in bitcoin has been growing, beyond mere speculation. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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