Pro 10

Venezuela and Argentina Are Buying the Dip, New Data Shows

If you look at the latest activity on Localbitcoins, there has been a large spike in recent days from both Argentina and Venezuela buying bitcoins. Both these troubled Latin American countries have displayed a steady increase in buying cryptocurrency due to rising inflation and troubled economies. But is the sudden uptick evidence of the two countries buying the dip?

What’s Happening in Venezuela?

Looking at the charts, one of the first things you notice is that bitcoin purchases in Venezuela didn’t really begin in earnest until the second quarter of this year. Since April of 2018, the volume has increased from around 17 million to over 3 billion for the second week of December 2018, where it rises astronomically.


This likely indicates a lack of knowledge, trust or means to purchase virtual currency. But as the economic situation has worsened and the government devalued the national currency by 95 percent from one day to the next, more and more Venezuelans are looking to shield their wealth.

Bitcoinist spoke to Eugenia Alcalá Sucre who founded Dash Venezuela earlier this year and she explained the many problems in Venezuela that prohibit them using their national currency. Not only is its value almost entirely wiped out from one day to the next but there is a limit to the amount you can take out of machines and a scarcity of notes. She said:

Bills are really, really scarce. You go to the bank and they only give you a little amount. They have limits. Even though you have the money in the bank you can’t take it out.

Venezuela is one of the most important countries for Dash cryptocurrency acceptance, with more than 2,500 merchants taking it including KFC.

While the western world is in panic at the crashing crypto market, for Venezuelans, it’s still a better option than their national coin. They’ve been using bitcoin (BTC) 00 to shield their wealth despite the value going down.

Volume Keeps Rising

However, the recent spike on Localbitcoins could indicate that more people are getting in as a lower price makes buying bitcoins more accessible.

Bitcoinist spoke to Rodrigo Marques CEO of Latin America’s largest crypto company and bitcoin investing platform Atlas Quantum. He said:

Look at the countries in Latin America, especially Venezuela and Argentina. It’s very hard for people to move money outside of these countries and people see bitcoin as a way to protect their investments. So it’s not just a matter of it’s faster and more stable, but making it possible for some people in some place to actually hold on to what they own, protecting their wealth.

A Look at Argentina

Argentina is in a similar situation, and Bitcoinist has been reporting on how Argentinians are using cryptocurrency to protect their wealth from inflation.

Reports of easing regulation could also see as many as 4,000 bitcoin ATMs in Argentina go online in the near future. However, the number currently still stands at two. According to Reuters, though, this is expected to rise to 30 by the end of the year.

Argentina is not undergoing a humanitarian crisis the likes of Venezuela. However, it is no stranger to inflation, which can almost be defined as hyperinflation since it is expected to reach 40 percent by the end of the year.

Moreover, the Argentine peso has lost more than 50 percent of its value against the dollar in 2018 alone. This makes it extremely hard for Argentinians to buy outside goods, to leave the country, or to protect their wealth.

Unlike Venezuela that is relatively new to cryptocurrencies, Argentina has demonstrated a longer history of buying bitcoins. Like Venezuela, though, it looks as if the dip of the week of November 24 when bitcoin was over $4,000 and the psychological barrier to it falling well under $4,000 now has encouraged more to jump on the bandwagon.


Are Argentina and Venezuela Buying the Dip?

Are Argentina and Venezuela buying the dip? It’s possible. However, the uptick also appears to coincide with the most influential Bitcoin and Blockchain conference in Latin America held on December 6 in Santiago Chile, LA Bit Conf. As we’ve seen, trading volumes of bitcoin tend to rally upon an event or announcement.

Moreover, Chile despite a much lower volume of trading in the first week of December, also saw a huge uptick that coincides with the event.

Are Venezuela and Argentina buying the Bitcoin dip? Share your thoughts!

Images courtesy of Shutterstock

Pro 09

Wealthy Families in Latin America Snapping Up Bitcoin

· December 9, 2017 · 3:15 am

The average citizen in many Latin American countries has turned to Bitcoin in order to survive, and now many wealthy families are becoming a believer in the cryptocurrency and are buying as much as they can.

The economic situation in many Latin American countries is extremely dire. Hyperinflation has hit Peru, Bolivia, Argentina, Venezuela, and Brazil, with some countries in worse shape than others (Venezuela). Many normal residents began to turn to Bitcoin when the economic situation began to hit rock bottom. Now it seems that the upper echelons of Latin American society have taken note as many wealthy families are now diving enthusiastically into Bitcoin.

A Land of Upheaval

Venezuela has served as ground zero for the economic crisis in Latin America. The situation is so desperate that many turned to crypto mining in order to buy the basic necessities, such as food and medicine. A shocking stat is that a full 3/4th of the country lost weight last year due to food shortages. Despite government crackdowns, the local population continues to actively trade in cryptocurrency, with Localbitcoins serving as the main hub.

The elites of Latin America have not proven immune to the economic situation. Wealthy families are now buying big into Bitcoin as a means to protect their assets from currency controls and rising consumer prices. Several cryptocurrency funds have opened up in 2017 to provide service to this elite clientele.

One of these funds is Solidus Capital, founded by Carlos Mosquera Benatuil, who fled to Rome from Venezuela to open the business. He says that family offices make up most of the funds, who are looking to turn around their fortunes. He says:

Latin America is very volatile. Cryptos are turning into a new haven for these families.

Bitcoin Offers Hope

Whether rich or poor, the skyrocketing inflation has eaten into everybody’s savings and spending power. Compounding the issue is strict government controls, especially the Venezuelan government cutting off access to US dollars. Bitcoin offers a refuge from these problems.

To show how much Bitcoin and other digital currencies have exploded in Latin America due to the ongoing economic crisis, the number of cryptocurrency transactions in Venezuela alone have tripled since the start of 2017. Demand in Argentina spiked in June when former President Cristina Fernández de Kirchner, whose policies put the country into a recession, announced that she was running again for political office.

People in Latin America are turning to Bitcoin as it offers immediate payment without the need for a bank. Even professionals are now demanding to be paid in digital currencies. For family members who live abroad, Bitcoin is a lifesaver as they can send money in an instant back home without the onerous fees charged by groups like Western Union.

The fact that anybody with a smart phone can now begin trading Bitcoin has led the way. The chief executive of the Panama-based Cryptobuyer digital currency exchange, Jorge Farias, says:

There are countries today without potable water where everyone has a cellphone. Anyone who has a smartphone can have a bitcoin account, which is something that couldn’t happen before. So its niche really is the whole world.

While many governments in Latin America continue to hamstring their economies, their citizens are increasingly turning to Bitcoin in order to survive or protect what they have left. It’s amazing that the situation is so bad that even the rich are now turning to the cryptocurrency to stave off the current economic effects.

Are you surprised that wealthy families in Latin America are having to turn to Bitcoin due to the economic circumstances? Let us know in the comments below.

Images courtesy of Twitter/@kyletorpey and Pixabay.