Economists believe that an unstable period of regulations will come. Investment and savings aside, bitcoin counts on other features that might result attractive for Venezuelans.
With at least five months suffering sub-double-digit monthly inflation, it seems that the worst is reaching an end for the Venezuelan economy. The South American nation appears to have left hyperinflation behind.
That situation lasted for at least three years and was the main cause of the emergence of bitcoin (BTC) as a form of protection among Venezuelans. The economic crisis made many Venezuelans migrate to other nations searching for better salaries because the Bolivar is too devalued.
Various Bitcoin and tech enthusiasts believe that the recovery of the Venezuelan economy does affect the adoption of bitcoin. The currency will still have strength, but it does present a slight decay in its importance, especially regarding the level of dollarization that the transactional economy approached recently.
According to these Bitcoiners, these influences grow so fast that people have now seen how bitcoin decayed and stopped being a rail as it was at the time. In previous years bitcoin had approached solid positions in the foreign exchange market through networks like LocalBitcoins or Binance.
Dollarized digital options grow steadily fast, and this growth started to be visible on the street in the form of stable coins, synthetic dollars, pseudo dollars, crypto dollars.
All these new options have caused the creation of an extension of the offer to access the dollar in the routine life of Venezuelans. One could say that this situation would find a balance at Bitcoin market share, but the market demand is now targeting the dollar.
Bitcoin and its Role as an Investment While Facing Dollar Inflation
Venezuela managed to reach a balance in economic terms due to increasing demand and circulation of dollars, both in its traditional form (cash, accounts abroad) and its digital alternatives (Zelle, PayPal ).
On the other hand, these adoptions reduce the requirement of bitcoin as a foreign exchange intermediary. But cryptocurrency is still an interesting investment tool. Daniel Arraez recalled it is an asset that would always have value.
In various nations, inflation is running above the central bank’s target range, so relaxing prices get tied to the policy credibility in zones with institutions that seem to be too fragile. Some analysts say rising interest rates will preserve the recovery by securing inflation expectations, shoring up credibility, and offsetting what some investors feel is the excessive reaction.
Wall Street is always a critical point for a region like Latin America, where sovereign bonds and currencies can suddenly jump at the first advise of political turmoil that could shake American economic policy.
By: Jenson Nuñez
