Venezuela, Colombia, Mexico, and Chile are the most prominent countries regarding their trading volume. Bitcoin’s trading activity has gathered momentum as the halving approaches.
The international P2P trading platform LocalBitcoins has recorded an increase in the Bitcoin trading volume in seven Latin American countries, among which the most prominent are Venezuela, Colombia, Mexico, and Chile. Trading activity around the first cryptocurrency has gained momentum as the halving event approaches.
UsefulTulips is a platform that compares the trading volume of LocalBitcoins and reflects it in equivalent values in US dollars. It allows having a better idea of the movement of Bitcoin trading in the region, eliminating from the picture the devaluation of the local fiat currency of each country. In this sense, it is possible to see that in the last two weeks of April the trading volume increased in Argentina (47.96%), Venezuela (16.17%), and Colombia (14%), concerning the previous week. The same has happened in Mexico (39.9%), Peru (13.9%), Chile (12.78%) and Bolivia (29.73%).
When Devaluation Strikes
In Argentina, the weekly Bitcoin trading volume in April (USD 430,000 on average), through LocalBitcoins, experienced a rebound about the last week of March. At that time, the exchange traded more than USD 213,000 through the platform.
The rebound in cryptocurrency trading may also be related to the impact of the coronavirus (COVID-19) on the economy of the region, which may be encouraging more Latin American citizens to seek a haven of value.
A new analysis states that Argentina’s economic problems influence the increase in the Bitcoin trading volume in the country. Matt Ahlborg explains that exchange controls and other economic measures have played a key role in the increase of the trading volume, which reached an all-time high in early 2018. Since then, it has increased by nearly 200%, currently reaching USD 1.6 million in transactions.
In Chile, the story is similar to the citizens of this country who have seen their currency weaken against the US dollar. Due to the devaluation of the peso (CLP) and the increase in the Bitcoin trading volume through LocalBitcoins, it is possible to understand that Chileans are finding in Bitcoin an alternative to protect themselves from the increasing devaluation of their national fiat currency. During the first week of April, the Chilean market in LocalBitcoins recorded a Bitcoin trading volume amounting to USD 371,176, thus reaching its all-time high.
In Venezuela, the US dollar soared and went from about 77,000 to 193,042 bolivars (VES) in the parallel market, in just one month, according to data from the website Dólar Today. The weekly average of Bitcoin trading volume so far this year is above USD 4.3 million, according to records. Venezuela remains among the countries with the highest trading volume in LocalBitcoins. Amid the Venezuelan economic situation, residents have found in Bitcoin a haven of value for their income and savings.
Besides, the behavior of trading volume through LocalBitcoins in Latin America confirms the increase in activity that the exchanges of the region have experienced.
By Alexander Salazar