Venezuela occupies the fourth place in terms of Bitcoin trading volume in the history of the P2P trading platform LocalBitcoins, even above China.
The oil-producing country has an intense activity in LocalBitcoins, according to data from CoinDance. This website ranks Venezuela in fourth place in the all-time leaderboard of the countries trading Bitcoin the most, with 11.18% of the total volume moving on the P2P exchange.
Since December 2019, the Bitcoin trading business on the exchange has ranged between 14.2% and 15.4% of the total volume moving on the website. Historically, the USA, Russia and the UK have been the leaders in the trading volume of the exchange, whilst the Latin American country is at a little over USD 700 million above China and the rest of Europe.
The graph shows that users have exchanged more than USD 6.32 trillion on the world’s leading P2P platform, where Asia leads the activity with more than USD 2 billion.
Colombia is the second country in the region regarding significant activity in cryptocurrency trading volume, in a distant 14th place with just USD 65 million, barely over 1% of the total activity of LocalBitcoins.
Brazil, Mexico, Peru, Chile, and Argentina, also from Latin America, appear among the top 50 countries in the historical classification of “countries that trade Bitcoin the most”.
Inflation and Remittances
Undoubtedly, the subject of inflation is apparent when seeking the main reasons for many analysts to assume a high Bitcoin trading volume in Venezuela.
The hyperinflation that the country is suffering has forced traders to use Bitcoin, among other cryptocurrencies, as a means of temporary refuge or bridge to access stable fiat currencies such as the US dollar, for both paying providers and saving profits.
However, there has been a rebound in BTC trading volume levels within the P2P LocalBitcoins exchange in countries such as Peru, Chile and Colombia. The majority of Venezuelan migrants, who left the country due to the difficult economic situation, went to those destinations to b able to send remittances to their families in the oil-producing country.
More than five million people emigrated as part of the massive exodus that Venezuela suffered a couple of years ago. This indicates that the flow of remittances from those nations to Venezuela has found Bitcoin through the P2P exchange as a natural bridge for the millions of US dollars sent to the families of those who remain abroad.
That scenario seems to be very favorable for the massive adoption of Bitcoin and other cryptocurrencies in Venezuela, but that is far from coming true. The lack of knowledge on the subject and the natural resilience towards this type of system, due to the precarious situation in a country with more than 70% poverty, do not allow the majority of Venezuelans to understand the use of new technologies.
Besides, there is widespread mistrust in the “Petro idea” as a cryptocurrency to save money, since this system has more failures than benefits. Of course, it has generated people’s discontent rather than an incentive towards decentralized technology.
However, those ingredients still represent a mixture of opportunities in the world for the long-awaited “crypto nation” experiment. Some projects like Dash have understood this and are committed to it, with a high presence and aggressive marketing within Venezuela.
By Willmen Blanco