Citizens in countries like Venezuela say that Bitcoin is the only asset that does not always fall. In Argentina, some stablecoins monopolize attention, but they believe they will soon return to saving Bitcoin.

The price of Bitcoin (BTC) has dropped by 67% since it reached its all-time high in November 2021. Various bitcoiners from Argentina and Venezuela recently explained how that situation had affected the economy of their countries.

Although those surveyed have different visions, most agree that Bitcoin has helped people become strong hands in countries punished by government decisions. They reflect that they have learned to be sovereign individuals with the cryptocurrency beyond the price of Bitcoin.

The Value of Bitcoin Goes beyond the Price

Venezuelan graphic designer Maximiliano Ramírez describes himself as a strong-handed Bitcoin holder. In other words, he is faithful to the cryptocurrency and does not sell his funds at the first sign of trouble.

The bitcoiner says that he saves and uses Bitcoin, as he has learned it is the only existing intelligent financial system. He explains that it allows him to make and receive transactions quickly and cheaply regardless of borders.

Ramírez also points out that Bitcoin gives him a record of his movements in the blockchain, outside the reach of state manipulation. He highlights that the price is not the only thing or what matters most.

Other Venezuelans believe that Bitcoin is helpful to circumvent the sanctions imposed by the United States on Venezuela and other countries. They say that the decentralized cryptocurrency helps reduce the dominance of the North American nation over the world financial system.

Bitcoin is the only Asset that Does Not Always Fall

Some think Bitcoin marks a distance from Venezuelan, Turkish, Argentine, and Zimbabwean national fiat currencies, which have progressively devalued. However, contrary to the cryptocurrency, they will never go up by 500% in 6 months.

Over the last ten years, several national fiat currencies, like the Venezuelan bolivar, have suffered devaluation. The latter has practically disappeared, while the value of Bitcoin has risen above 511%.

That leads to understanding why many Venezuelans and Argentines still find Bitcoin valuable despite the price drop in recent months.

Dollarization is not a good option in Venezuela since inflation even impacts the prices in US dollars. Bitcoiner Emilio Torres considers Bitcoin better than the Venezuelan bolivar (VED) or other fiat currencies in his country.

The Situation with Bitcoin in Argentina and Venezuela

Although there are many strong-handed Bitcoin holders in Argentina and Venezuela, most citizens do not focus their attention on the cryptocurrency.

While the interest in Bitcoin among Argentines has declined over time, that of Venezuelans has increased recently. The trade of BTC in bolivars on peer-to-peer (P2P) platforms has also dropped progressively since last year.

Gabriel Vago, CEO of the exchange ArgenBTC, commented that a similar situation is happening in Argentina. He noted that Bitcoin trading has dropped as people buy stablecoins like Dai (DAI) and Tether (USDT) to escape the exchange control.

Vago also said that the collapse of Terra caused fear in the market and drove many Argentines away. However, the demand for stablecoins is still increasing, as citizens use them to save.

By Alexander Salazar

Ethereum’s Solidity is more vulnerable than the programming language employed by Bitcoin. There are already successfully active applications carrying out their activities on the Bitcoin Lightning Network.

Ethereum is usually acknowledged as the most significant network to lead applications thanks to the versatility regarding the generation of smart contracts; however, Bitcoin’s Lightning Network (LN) is boosting its pace of development and could end up putting Vitalik Buterin’s network aside in this area.

Bitcoin, a more balanced and decentralized platform than Ethereum, should be the best ally of developers and Web3 networks. However, the ether network (ETH) has an apparent advantage over its development language, Solidity.

A language such as Solidity is much more versatile, complete, and friendly for creating smart contracts. Hence, most applications and projects that apply altcoins get connected to Ethereum and one of its side chains.

Despite the advantage that Ethereum has over Bitcoin, the Lightning micropayment network got highlighted as an alternative option for those who prefer the technology created by Satoshi Nakamoto. And, Solidity still has many flaws. Currently, the ETH language is as versatile as it is vulnerable to dealing with attacks. C++, on the other hand, appears to be safer.

Many tools build the third layer of Bitcoin or L3. It is called L3 since Bitcoin, as the first network, is the first layer. The second layer is the Lightning network, which, due to its transfer speed and low fees, is ideal for being the fundamental tool for other solutions with cryptographic technology.

A vast group of applications and tools got created with a focus on the Bitcoin Lightning micropayment network, making Bitcoin enthusiasts reflect on the capacity of this second-layer solution.

DeFi with Bitcoin on the Lightning Network

Atomic.Finance made its first job on the Ethereum network. However, Ethereum did not offer them the required balance for a project like the one the developers had in mind in the long term.

The Atomic finance team, intending to circumvent possible struggles linked to Solidity flaws, Ethereum’s transition to Proof-of-Stake (PoS), and the apparent requirement to deal with another token to obtain more liquidity, preferred Bitcoin and Lightning.

The app is currently in a beta stage of closed-door testing, and only a limited group of people have access to its features. However, this platform got created to offer its users the ability to use a wide range of financial strategies to profit from their BTC investments.

By: Jenson Nuñez

The devaluation of collateralized assets had similar backlashes in both cases. The way out of the mortgage crisis does not seem pertinent in entities such as Celsius.

The case of Celsius Network attracted interest in the digital asset space because many users think their funds might be in danger due to the liquidity crisis harming the network. This situation is similar to the mortgage crisis that affected the United States of America in 2008.

According to an analysis by Michael P. Regan for the Bloomberg news agency, the first common point between both situations is the remortgaging of assets and turning them into collateral loans.

Bitcoin (BTC) investment and lending platform Celsius reported on Sunday, June 12, that it was suspending fund withdrawals for its users. This situation happens due to various aspects that split the entity’s liquidity.

The drop in the price of the synthetic ether (ETH) token stETH, handled by the Lido staking pool, was one of the possible causes, given that Celsius counted on 445,000 stETH under its control.

Also, as Celsius employed the funds of its users to invest in other protocols and generate profits, the decrease in the price of BTC led to liquidating its collateral on some lending platforms. To prevent this situation from happening, the entity had to house more collateral on platforms like MakerDAO, the stable coin DAI (DAI) issuer.

On the other hand, the mortgage crisis of 2008 was vast growth in mortgage loans in the United States of America. People requested them to take advantage of the low-interest rates that the State used to improve consumption after the September 2001 attacks.

However, mortgage banks ended up bringing loans to citizens who could not afford them. Even many loans had a variable interest rate, so in 2006, when the rate reached high peaks again, they could not meet their debts. This situation led to an increase in sellers, multiplying the supply of houses on the market and decreasing the property values.

The Celsius Case and the 2008 Mortgage Crisis Might be Related

One of Michael Regan’s statements focuses on the fact that in the terms and conditions of use regarding Celsius, they decide that the user allows the network to mortgage and remortgage the digital assets that users house there.

If Celsius faces bankruptcy, users could lose the funds they housed in it. It even clarifies the possibility that these affected people have zero legal rights to complain about this eventual situation.

In the mortgage crisis of 2008, one of the factors that unleashed the collapse of the real estate sector was remortgaging. When applying for a mortgage loan, a person asks a financial entity for funds by putting their house as collateral.

By: Jenson Nuñez