The price of Bitcoin is continuing to skyrocket in Venezuela due to the country’s crumbling economy and infrastructure.
To say that there’s a humanitarian crisis going on in Venezuela is a massive understatement. The socialist policies of Nicolás Maduro, carrying on the groundwork laid out by Hugo Chávez, has left the country’s economy in shambles. Many people turned to Bitcoin mining in order to generate funds to buy the most basic of essentials: food, medical supplies, and so on. The country’s collapsing economy is easily seen by the fact that Bitcoin price continues to surge as the bolivar spirals ever downwards.
Venezuela in Shambles
The socialist regime of Nicolás Maduro has left the country in ruins. Political dissent is stifled, freedom of the press is near non-existent, and basic food items cannot be found. People are literally starving, as is evident from desperate people attacking and eating animals found in zoos.
It’s sad to say, but there is a chart to quantify the ongoing economic misery. Bloomberg created the Bloomberg Cafe Con Leche Index that charts the price of a cup of coffee. One year ago, a cup cost 2,300 bolivars. Today, that same cup of coffee costs an eye-watering 2 million bolivars. That’s an inflation rate of 86,857 percent!
Bitcoin Offering Some Hope
As the bolivar is essentially worthless, many people turned to Bitcoin as a store of value. A lot of people began mining for Bitcoin in order to keep their families alive. Naturally, the government of Venezuela began cracking down on such mining. There were even reports that police and government officials would confiscate Bitcoin mining equipment and use it for their own gain.
The ongoing economic misery shows how much the populace has turned away from fiat to cryptocurrency. The demand for Bitcoin is staggering. The week of January 13th, 2018, saw a total trading volume of 244 bitcoins. This amount increased to 363 bitcoins for the week of March 3rd, 529 bitcoins for the week of June 2nd, and 621 bitcoins for the week of August 4th.
The notable feature is the cost of buying bitcoins with bolivars. A BTC cost just over 486 million bolivars on April 18th. That cost shot up to 587 million bolivars on July 18th, 845 million bolivars on July 26th, and 981 million bolivars on August 6th. One year ago, 1 BTC could be bought for 34,000 bolivars. The most current price is 894 million bolivars.
With such staggering price increases and trading volume, you can see firsthand how desperate the people of Venezuela are. Almost 90 percent of the country’s population lives in poverty, and almost three-fourths of the populace lost 20 pounds of weight in 2017 due to a lack of access to food. It’s frightening to think that being lucky enough to buy some bitcoins a year ago and then hodling them until today could mean the difference between living and dying in the ravaged South American nation.
What do you think about Bitcoin’s role in the economy of Venezuela? Let us know in the comments below.
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