In Venezuela, it is not surprising that the use of Bitcoin (BTC) has exploded recently simply because of the high rate of inflation that is now running away and completely out of control. Data from Coin Dance, according to an article in Cointelegraph attributed to William Suberg, the increasing volumes of Bitcoin are a result of inflation that, according to the IMF could reach 10,000,000 percent.
During a of seven days to July 20, Coin Dance which tracks trading activity on the P2P exchange Localbitcoins, Paxful and Bisq, confirmed a record amount of volume – a total of 57 billion in the local currency, bolivars. This was a new record with the previous being 49 billion, which appeared in in the previous week.
With the runaway inflation of 10,000,000%, citizens are now resorting to any means necessary for storing value. Of course, the government imposed embargoes on foreign currencies and it does not support cryptocurrency trading but again, the country watching its economy collapse. Note that inflation concerns in Columbia and Argentina are also starting to surface and as we would expect activity in Bitcoin is increasing in these countries as well. Remember when people bought Gold to protect themselves in such economic situations? Is Bitcoin the new Gold?
Actually, Tom Lee of Fundstrat Global Advisors has made some interesting points about Bitcoin and Gold over the past two years. He is often featured on CNBC discussing Bitcoin and US equity markets – please go to Youtube for previous interviews.