The complicated situation in Venezuela developed the crypto industry there. Because of the money printing and the hyperinflation many Venezuelans found Bitcoin as a store of value for their savings.
The Bitcoinization of the country is growing at an amazing speed. Venezuela is in a leading position in terms of Bitcoin adoption – ranked third in the world.
The high demand for Bitcoin was because US dollars were difficult to obtain. The situation with the devaluing currency led many citizens to go to the black market and find what they need – the dollar.
They no longer have to do that because Nicolas Maduro’s government accepted the fact that the dollar is needed in the country.
Earlier this year the government allowed the Venezuelan banks to open accounts for their customers in dollars. In addition many companies can start paying their workers in foreign currencies.
But is this the end for Bitcoin?
After the dollar is accepted from the government and it’s no longer illegal to store it what will happen with Bitcoin?
According to many, Bitcoin will continue to act like a safe haven against inflation. Alberto Zambrano is a founder of the AJZ Institute, a regional project that offers training on crypto, blockchain and other technologies. He said that the dollar “will never be a store of value in the same way that Bitcoin is today”. Perhaps the Venezuelans will continue to hold Bitcoin and the reserve currency as well. Especially now – the price is growing really fast and the institutions are interested in the space.
This week the US Senate approved stimulus checks for $1.9T. This is far away from the $2.2T approved in March 2020 but it’s still a big number. The new money can increase the inflation of the dollar.
Venezuela is a very active Bitcoin trading market. Trading volume in the country is the highest among all Latin American nations, according to data from metrics site Useful Tulips.