As Inflation Declines in Venezuela, Interest in Bitcoin Grows

Alexander Salazar
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As Inflation Declines in Venezuela, Interest in Bitcoin Grows

The government stops the inorganic monetary issuance, which reduces inflation in Venezuela. A potential agreement between Argentina and the IMF keeps prices in Argentina controlled for the time being.

In February, monthly inflation increased by 4.0% in Argentina and 1.7% in Venezuela. Private consultants provided the data about the former, while the Venezuelan Finance Observatory (OVF) was in charge of the ones about the latter.

Analysts at OJF & Asociados said considerable price increases occurred in Argentina, particularly in transportation, food, and beverages. Those items had monthly variations of 6.3% and 5.5%, respectively.

In Venezuela, prices of communication (16.7%) and services (10%) increased considerably. The reduction in the price of items such as food (-10.5%), alcoholic beverages and tobacco (-6.2%), and miscellaneous goods and services (-5.8%) offset that.

The drop in prices caused Venezuela to drop places in the Latin American inflation ranking in February. However, the South American country should maintain similar figures to stop leading it year on year.

According to OVF data, year-on-year inflation was 246% in Venezuela and 51% in Argentina.

Reasons why the Inflation of Venezuela Falls

There have been five consecutive months of sub-double-digit monthly inflation in Venezuela. In addition, twelve months in a row with inflation below 50% indicates there is no longer hyperinflation.

After the latest monetary reconversion in Venezuela, the State stopped the issuance of inorganic money occurring for several years. Ronald Balza, a university economics professor, explained that hyperinflation in Venezuela went away because the government stopped financing itself with accelerated monetary issuance.

Balza seems to accept the truth of the postulate of Milton Friedman, one of the references to economic liberalism. That American economist, a winner of the Nobel Prize in 1976, said that inflation is always a monetary phenomenon.

Factors that Make Inflation in Argentina Higher than in Venezuela

The above data indicate that Argentine monthly inflation exceeds the Venezuelan one in February. However, there has not been a considerable increase in prices in the former, but a drop in the latter.

An agreement between Argentina and the International Monetary Fund (IMF) has stopped the escalation of inflation and the devaluation of the national fiat currency. However, that arrangement would only extend the payment term, which the next government must handle.

Before the negotiation, Congressman José Espert said that Argentine inflation could reach 100% year on year without agreeing on the debt payment. There could be a tense calm since 4% or 5% monthly inflation could skyrocket to levels not seen in decades.

Bitcoin Offers Citizens Monetary Sovereignty

The Bitcoin ecosystem in both Venezuela and Argentina seems to be constantly growing. The emergence of new exchanges and companies providing services with Bitcoin (BTC) and the growth of groups on social networks prove that.

In Argentina, people use Bitcoin as a hedge against the devaluation of the national fiat currency in the medium and long term.

In Venezuela, the bolívar (VED) remains stable, but the interest from the population in Bitcoin is growing. The cryptocurrency offers protection against the devaluation of the US dollar, slower than that of Latin American currencies. In addition, it provides features such as unseizability and resistance to censorship, which fiat money does not have.

Venezuelan economist Daniel Arraez foresees a turbulent period in terms of regulations in the short run. He believes that the growth of BTC usage could happen underground. The security and control agencies of the State could affect the actors who come forward or promote it.

By Alexander Salazar

A Senegalese Woman Fosters Female Empowerment with Bitcoin

Alexander Salazar
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A Senegalese Woman Fosters Female Empowerment with Bitcoin

The difficulty of getting a bank loan in West Africa led Bineta to look for Bitcoin as a crucial part of her plans. Mama Bitcoin sees the pioneering cryptocurrency as a technological revolution to unlock development in Senegal.

Bineta, also known as Mama Bitcoin, is a woman who owns the first retailer in Senegal to accept BTC as a means of payment. She also belongs to the first generation in her family who can read and write without problems.

The initials of her name, along with her maternal instincts, inspired the pseudonym Mama Bitcoin. She seeks to motivate other West African women to learn about blockchain technology and the pioneering cryptocurrency. She recently said very few women are active in the blockchain space worldwide, and the situation is the same in Senegal.

A combination of good intentions and incongruous circumstances helped Bineta find out about Bitcoin in early 2017. She had dreamed of opening the first bakery in her town, Mbour, 90 minutes south of Dakar, the capital of Senegal. However, she needed money to deliver freshly baked Neapolitans to the community every morning.

In West Africa, it is too difficult to get a bank loan for a business idea, especially for women. For that reason, Bineta looked for alternative means until a friend from Cameroon told her Bitcoin could work for her.

Bineta Learns Bitcoin Can Help Her People Overcome Problems and Reach Freedom

The curiosity of Bineta grew dramatically after exhaustive research, as she quickly realized that Bitcoin was crucial to her plans. By mid-2017, Mama Bitcoin had spent many hours reading Bitcoin-related content in French and English, translating whenever she could.

She concluded that Bitcoin could help her build much more than a new bakery for her people. The more she learned about the crypto asset, the more she realized they needed it to overcome many problems. She believes that BTC is a tool for freedom, and blockchain technology and decentralization will change the development of Africa.

Bineta changed the course of her plans for the bakery after learning about Bitcoin. She abandoned it since the idea of promoting BTC among women in West Africa took its place. In 2017, the progress and price of the crypto asset increased along with her understanding of the protocol.

Mama Bitcoin sees the pioneering cryptocurrency not just as a means of self-funding without using a bank. She also considers it a technological revolution to unlock growth and development in her country.

Bineta started to write articles about Bitcoin on social media, reaching out to the Senegalese cryptocurrency community and reassessing her goals.

She Accepts Bitcoin for Her Services, Proving It Is Not a Speculative Asset

Given her business experience and the proximity of Senegal to the Atlantic Ocean, Bineta decided to dream big. She created the first business in Senegal to accept cryptocurrencies as payment to connect fishers directly with consumers. She stated that transactions in Bitcoin prove it is a peer-to-peer payment solution, not a speculative asset.

Even though her retail business aims to streamline the fishing industry, it strives to undermine overfishing in West African waters.

Since Senegalese and West African people are skeptical of Bitcoin, attracting more women into cryptocurrencies remains a long-term project. However, Mama Bitcoin has infected a few of them with her enthusiasm to learn about the Leading crypto asset.

By Alexander Salazar

Joe Biden Is Ready to Sign an Order to Regulate Cryptocurrencies

Alexander Salazar
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Joe Biden Is Ready to Sign an Order to Regulate Cryptocurrencies

The executive order will require federal agencies to examine potential regulatory changes and report what they do about cryptocurrencies. The team of Joe Biden is under pressure to play a more coordinated role, as cryptocurrency companies demand a clear regulatory framework.

US President Joe Biden will sign a long-awaited executive order to regulate cryptocurrencies, said people familiar with his plans.

The executive order would describe the strategy of the US government to control cryptocurrencies.

Concerns that companies and individuals could use crypto assets to circumvent the restrictions imposed on Russia gave origin to that decree.

That led Senator Elizabeth Warren and Senate Banking Committee Chairman Sherrod Brown to subject the crypto industry to intense scrutiny. They believe Russian people and companies may be using cryptocurrencies to evade sanctions.

The Executive Order from Joe Biden Could Be Ready in the Coming Days

The executive order, whose signature Bloomberg predicted for February, has been underway since last year. Even though President Biden should have issued it during the third week of the month, it has not happened yet.

Besides national security and the economic impact of cryptocurrencies, the order will require federal agencies to examine potential regulatory changes.

Federal agencies across the government will have to report what they do about cryptocurrencies at the end of this year.

Agencies Involved in the Plan of the Joe Biden Administration

Since the Biden administration assesses that cryptocurrencies have economic implications for national security, several agencies are involved in the plan. They include the Treasury Department, the State Department, the Department of Commerce, the National Economic Council, and the National Security Council of the White House.

The plan could start to create roles for agencies across the government, from the State Department to the Department of Commerce.

Joe Biden keeps his team under pressure to play a more coordinated role, as executives in the crypto industry complain that US rules lack clarity.

Cryptocurrency companies have demanded a clear regulatory framework for their industry for months. March seems to be the probable month, but t remains to wait for the final publication by the White House.

The Fed Is Considering Creating an American CBDC

The Joe Biden administration might consider the possibility of the United States issuing a central bank digital currency (CBDC). The Fed recently published a preliminary document about CBDCs and opened a public comment period.

The document tiptoes around an issue that has given rise to considerable debate among the senior ranks of the Fed. However, other central banks worldwide have been exploring the adoption of CBDCs.

A CBDC could provide a secure payment option for households and businesses as the payment system becomes faster, says the Fed. However, the document warns that it would also lead to financial stability risks and privacy issues.

Various people who have attended government meetings say the Biden administration could refrain from adopting a strong position on CBDCs. They argue that the US Federal Reserve is still considering adopting those centralized digital currencies.

The United States could continue to lead the cryptocurrency market worldwide thanks to a CBDC. However, the Fed stated that it would wait for the support of the White House and the US Congress to move forward.

By Alexander Salazar

The Cryptocurrency Community Debates the Executive Order Signed by Joe Biden

Alexander Salazar
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The Cryptocurrency Community Debates the Executive Order Signed by Joe Biden

The community was optimistic about the regulation since it made clear the government would not ban Bitcoin. The executive order states citizens will continue to seek crypto assets for advantages like the speed and anonymity of their transfers.

US president Joe Biden recently signed an executive order to regulate Bitcoin (BTC) and other cryptocurrencies. The community immediately started to comment on the document, whose announcement in October had raised high expectations.

The community was optimistic about the announcement, as the Biden administration legitimized the industry through that regulation. It makes clear the government does not plan to ban Bitcoin or cryptocurrency mining as happened in China in 2021.

All the optimism about the order led some people to attribute the rally in the Bitcoin price to government action. However, the community also analyzes whether the document is positive or negative for the ecosystem.

Renowned bitcoiner Matt Odell stated it is impossible to interpret the Biden executive order as a law not requiring approval of Congress. He said that usually happened with those documents, which he considers not worth discussing.

Bitcoin developer Matt Corallo pointed out that the executive order only allows understanding the need for information. He added the community should participate in the research for the reports, along with the laws and regulations deriving from them.

There Is Debate between Accepting or Rejecting BTC in the United States

Robert Kiyosaki recently said he was sure the executive order signed by Joe Biden would launch a new era for crypto assets. The author of the book Rich Dad Poor Dad thinks the government will seize the funds in Bitcoin or Ether (ETH) of citizens.

Kiyosaki added that they might refer to cryptocurrency holders as criminals or communists, aiming to promote their CBDC.

However, cryptocurrency market analyst Jan Wüstenfeld disagrees with Kiyosaki, saying that the United States views Bitcoin as a crucial tool.

Nigel Green, the CEO of deVere Group, is among those who believe that the Biden executive order on cryptocurrencies is historic.

Green thinks it is impossible to avoid crypto assets in this increasingly digital world. Since technology drives how people live, work and do business, it is sensible to have digital money.

The CEO highlighted that the largest economy in the world decided not to ban cryptocurrencies. He explained that that led them to create a coordinated and comprehensive approach to digital asset policy.

For Green, the executive order underlines that world citizens will continue to seek cryptocurrencies for the advantages they offer. These include the convenience and speed of transfers with them and anonymity.

He compared Bitcoin with the digital dollar, which would allow the government to track all transactions. He said that that would give Washington further powers to control how people use their money.

The Bitcoin ecosystem had been waiting for the Biden executive order for months. The government decree will request federal agencies to coordinate their work in the cryptocurrency sector. However, it does not establish specific positions the administration wants them to adopt on those assets.

By Alexander Salazar

The Outflows of BTC Have Exceeded Its Inflows on Crypto Exchanges Since July

Alexander Salazar
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The Outflows of BTC Have Exceeded Its Inflows on Crypto Exchanges Since July

While the holdings of BTC on FTX have tripled to 103,200 units, those of Huobi have dropped by 6% to 12,300. The realized price of on-chain coins is USD 24,100, which suggests a 63% gain for long-term holders.

Since July, there have been more outflows of Bitcoin (BTC) in net terms on exchanges. However, four of the leading platforms have had nearly the same volume of net inflows.

The total outflows on most cryptocurrency exchanges are 46,000 BTC, equivalent to around USD 1.8 billion.

Data from Glassnode indicates that only Binance, Bittrex, Bitfinex, and FTX have had net inflows of 207,000 BTC. Since July, net outflows have reached 253,000 BTC on the other exchanges analyzed.

The most dramatic change in BTC holdings has occurred on the FTX and Huobi exchanges. FTX has significantly tripled the amount of BTC it owned to around 103,200 units. Meanwhile, the volume on Huobi has dropped to 12,300 BTC, down 3% from over 400,000 BTC it held in March 2020.

The net outflows of the pioneering cryptocurrency from exchanges have been steady since 2021, with significant spikes in August and January.

Realized Price of On-Chain Coins Suggests a 63% Profit for Long-Term Holders

However, Glassnode explains that the low inflows are due to the current scale of uncertainty in the cryptocurrency market. They suggest that there has been a shift towards derivatives trading over spot sales to hedge risk.

The measurement of BTC inflows to exchanges aims to help better understand whether investors are preparing to liquidate or trade their coins. Net inflows reveal there is selling pressure, while net outflows show there are higher holdings.

On-chain coins maintain a realized price of USD 24,100 per BTC, representing a 63% profit margin for long-term holders. The realized price is the average value of the coins moved on-chain.

As opposed to the implied price of USD 39,200, the realized price is the estimated fair value per coin. It is currently just below the breakeven point, with BTC trading at around USD 38,619, according to CoinGecko.

Low Losses by Holders May Mean that Sellers Are Burning out

The losses by short-term holders are around 15% lower. The average price of coins moved on-chain in the last five months has been around USD 46,400, according to Glassnode.

In addition to the low volume of inflows and outflows, the profit-and-loss ratio of sellers has flattened since January 2021. Although there has not been a significant capitulation event as in previous cyclical funds, long-term holders are stopping selling.

Glassnode notes there have historically been low losses for short-term and long-term holders. They explain that this may signal an increase in the likelihood that added vendors will burn out.

The analysis indicates that there is still a risk of a final and complete capitulation of short-term and long-term holders, as in the lows of previous cycles.

Bitcoin is trading at around USD 38,619 and has accumulated a 10.6% loss over the last week. Its daily trading volume is above USD 24,56 billion, and its market capitalization is about USD 732.91 billion, according to CoinGecko.

By Alexander Salazar

Venezuelans Would suffer more Inflation Due to the Increase in Wages in Petros

Jenson Nunez
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Venezuelans Would suffer more Inflation Due to the Increase in Wages in Petros

The fiscal crash due to the increase is less than 20% of the annual budget. This growth is the first salary increase statement in a year and a half.

The administration of Nicolás Maduro counts on enough resources to execute the salary increase announced last Thursday, March 3, without having to print inorganic funds, as happened before. The statement arrived from the director of Ecoanalítica, Asdrúbal Oliveros, in the Tertulia y Dinero podcast, which got aired last Friday, the 4th, on YouTube.

The launch arrives amid relative stability in the US dollar exchange rate and a slowdown in inflation, according to Jesús Leonett. The new minimum wage revealed by President Nicolás Maduro is 126 bolívares (VED), equivalent to 0.5 petro, the cryptocurrency encouraged by the Venezuelan government. If a food ticket gets added, the resulting integral salary will circle VED 172, which equals 40 dollars.

Oliveros also highlighted that the current minimum wage in Venezuela, until now VED 7, counts at such a low rate that it has lost relevance as a marker of salary in the country.

Oliveros assured that, beyond public employees, the private sector has exponentially increased the minimum income to at least USD 100. According to this economist, the first impact will be at the business sector with the lowest salary levels since pressure will come to light for a proper salary adjustment.

The government explained in the past how monetary expansion works to grant salary increases, which caused almost immediate inflationary effects. Oliveros said the scenario seems different because the current administration has the cash flow to deal with those salary increases.

Greater Liquidity in Venezuela

According to Oliveros, the fiscal impact of this increase in the minimum wage circles USD 3.3 billion. He said the government might receive at least USD 16,000 and USD 18,000 million this year, so he does not expect such intense inflationary pressure, although there could be a slight fluctuation in the exchange rate, not a sudden rise.

Oliveros added that the Venezuelan administration waited a year and a half after the last wage increase, maybe because it hoped to have the required resources.

Although there is talk of a slowdown in inflation, the economist José Miguel Farías, who also took part in the interview, highlighted that inflation is near double digits in Venezuela.

In this regard, a report made by Ángel García Banchs reflected that the purchase of bitcoin became the best alternative to fight against inflation in this South American country in the last two years.

The report highlights that the cost of goods and services in Venezuela grew 395 times in two years, while bitcoin increased with a ratio of 1 to 303 in the same period.

By: Jenson Nuñez

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