Venezuela’s LocalBitcoins volume has reached an all-time high (ATH) this week as the Bolivar extends its spectacular downfall and the authoritarian Maduro regime continues its oppression. According to CoinDance, Venezuela’s weekly LocalBitcoin volume has reached more than 1,700 BTC this week (~$5.68 million at current prices), a new record. The new total is up from last week’s previous ATH of roughly 1,600 BTC.
As the beleaguered Venezuelan people continue to suffer oppression from the authoritarian regime of President Maduro’s government, they are seeking alternative means of value. Unfortunately, metrics for neither Bisq nor Paxful are available in Venezuela, otherwise, they would likely be experiencing similar surges.
A Deteriorating Situation
Following several high-profile moves by the government to sell oil for the ‘cryptocurrency’ Petro and forcibly convert pension balances into the Petro, Venezuelans are rapidly running out of options to save any semblance of value.
Venezuela’s situation is a prime example of the magnitude of adverse effects that poor monetary policy and coercive practices can have on a nation, particularly one that was formerly one of the wealthiest in the world.
The CoinDance chart for LocalBitcoins volume in the country has gone parabolic since this summer — when measured in Bolivars rather than Bitcoin — and shows no signs of slowing down. Additionally, the government’s position on the economy, unclear plans for the Petro, and warming relations with both China and Russia have many outside observers seriously worried about the regime’s future direction.
It remains uncertain whether or not cryptocurrencies — mainly Bitcoin — are widely available enough to provide the type of relief that is needed for many Venezuelans. Initiatives by outside organizations and businesses to adopt cryptocurrency payments in Venezuela — like Church’s Chicken — as well as controversial cryptocurrency donations by airdrop from major exchanges have become more common, however.
As Maduro’s government seeks to sever ties with the US-associated international banking system further, the future reserve source for the South American country is unclear. The Bank of England recently refused to release gold back to Venezuela, and the notion of a centralized, authoritarian Petro cryptocurrency filling the role of reserve value is absurd.
The country’s closening ties with Russia and China will likely provide the avenue that it seeks to skirt U.S. sanctions, but both China and Russia are also susceptible to U.S. financial pressures. Holding other foreign currencies in reserve is currently Venezuela’s only option for maintaining any form of value as the Bolivar is worthless, their access to gold has been denied, and the government continues to move away from the USD.
For now, the Venezuelan people are increasingly turning Bitcoin, and hopefully, it can provide some level of relief that they desperately need.