Bitcoin, the popular digital currency had a few great weeks on the market as its price surged from mid $600s to over $700. The increase attributed to increasing demand from the Chinese market saw an abrupt end after unconfirmed reports stated that the Chinese government will soon be implementing measures to prevent capital flows in the form of Bitcoin or other digital currencies.
With Bitcoin price currently staying a bit under the $700 mark, the digital currency may soon find itself in a favorable spot, thanks to the Latin American nation of Venezuela. The speculation of another round of price rise is based on the current economic situation in the country and Latin America overall. The currency of Venezuela, bolivar has lost most part of its value in the past few months. As the economy weakens, bolivar is now trading at almost 50% less against US dollar compared to the beginning of this year.
With no immediate improvement in sight, Venezuelans are increasingly finding ways to convert their earnings from bolivar to other currencies, which includes US dollar and Bitcoin. Latest reports indicate an increasing demand for Bitcoin among those living in Venezuela. Local Bitcoins, the peer-to-peer bitcoin exchange marketplace has seen a major spike in trade since the past few months.
For a country that is still new to Bitcoin, the trade volumes which used to be in terms of less than hundred Bitcoin a week during the same time last year now stands at around 400 BTCs a week. Even though the demand is too negligible at the moment to significantly affect the market rate, it is still a good start. With more people getting familiar with the digital currencies, the trade volumes many soon increase in the near future.
It is not just Venezuela which is seeing the trend, similar to that in China. Investors from other Latin American nations including Chile and Argentina are also following suit. The demand for Bitcoin in the immediate future is also expected to go up in England and the United States as the former reels under the uncertainty created by Brexit and the latter troubled by presidential elections.
Ref: QZ | NYT Image: Shutterstock