Venezuela and the bitcoin

Venezuela and the Bitcoin

The value of the bitcoin digital coin grows and grows. And one of the causes is the crisis that Venezuela is going through.

The increase in demand in China and the depreciation of the yuan is the main reason why the virtual currency has surpassed US$9,000 for the first time in three years.

But, according to analysts, Venezuelan inflation, the devaluation of the bolivar and the parallel exchange market in the South American country have also done their part.

Bitcoin is the result of Internet transactions made through thousands of computers and is used as a monetary safe haven and as an anonymous way of moving money around the world.

And in 2016 it was the best performing currency in the world, with a growth of 125%. 6 curious figures that show the low value of bills in Venezuela. A growth that is basically the result of a greater demand than supply of virtual currency.

The factors that explain the good behavior of the crypto currency are several, says David Moskowitz, founder of Coin Republic, a website based in Singapore specializing in bitcoin.

“The increase since November could be due to the demonetization of India followed by Venezuelan capital controls and rumors of similar actions in other countries,” he explains. “There was no money anywhere, this was desperate”: chaos in Ciudad Bolivar after massive looting by the Venezuelan banknote crisis.

And Kevin Charles, Surbitcoin’s general manager, points out that more and more Venezuelans are betting on virtual currency. “Without a doubt the situation in Venezuela echoes internationally about the benefits of bitcoin and there is some interesting and growing demand for crypto currency,” he tells BBC Mundo.

Once achieved, bitcoins can be exchanged for bolivars for everyday life in Venezuela or for dollars, which are used, for example, to buy abroad basic products that are scarce in Venezuela.

In addition, the parallel dollar market, the most used for exchange in the country, makes the acquisition of bitcoins and then dollars, very much in demand due to the devaluation of the bolivar, especially profitable.

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