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Struggling Economies in South America Forcing LocalBitcoins Boom

  • Alexander Goborov
    🤷 Opinions

    Economic alternatives such as Bitcoin are being snapped up in South America as many countries on the continent face financial uncertainty

Struggling Economies in South America Forcing LocalBitcoins Boom
Cover image via u.today
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Alexander Goborov, Darryn Pollock

Venezuela has been at the forefront of a cryptocurrency adoption wave as it is one of the few countries globally to have a government-backed coin, called the Petro. However, the Petro is just the tip of the iceberg for a continent that is having widespread economic issues.

Failing economies and hyperinflation across most of South America’s nations have seen an influx in trading volume for peer-to-peer site LocalBitcoins where individuals trade Bitcoin with one another as an alternative to their native currency.

So, while Venezuela may have the Petro, and their president’s desire to push it, there are a lot of citizens who are stocking up on a decentralized alternative in preparation for worse things to come.

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Big drive in crisis-riddled Venezuela

A look at the current trading volume of LocalBitcoins in a number of South American countries shows an obvious influx, even more so than at Bitcoin’s peak in volume during the December 2017 crypto bubble.

In Venezuela, the spike only really began in March of 2018, when the South American country started to truly feel the hyperinflation of its native currency, the Bolivar, which added to other major social and political problems of the nation. Since March though, the figures have been growing exponentially as more and more people look to the decentralized site to stock up on an available currency of value. Currently, the trade is peaking at close to 1.25 billion bolivars, which is over 19 million US dollars, a serious sum, indeed, that the Venezuelans have invested in Bitcoin this October.

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Similar situations in crisis countries

But, it is not just Venezuela that is seeing this influx in LocalBitcoins trading. Others, such as Argentina, whose Peso is also under threat at the moment with inflation striking it hard, have recently started to contribute to a giant surge in LocalBitcoins trading. Last week alone, the Argentinians put close to 8 million Argentine pesos into Bitcoin purchases, which is roughly a quarter of a million US dollars.

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Bear in mind that here we are talking about Argentina’s average citizens residing in a country with a comparatively low standard of living. Undoubtedly, these figures are indicative of major local fiat to crypto movements, as they are, crucially, of Argentina’s willingness to re-enter the crypto market in a big way.

Along with the two aforementioned countries, this pattern is also clear in Colombia, Peru, and Chile, all of whom are struggling right now, having entered an economic crisis period with their local currencies becoming extremely frail.

After some far-reaching turmoil comprised of inflation and general socio-economic instability, the Colombians have also decided to join the crypto race and bought close to 8 billion pesos worth of Bitcoin this month, which is roughly 2.5 million US dollars.

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This month’s Bitcoin purchases in another South American nation, Peru, are currently peaking at close to 3.5 million Peruvian sols, which is over 1 million USD, an impressive amount for those who support themselves mainly through agriculture.

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Despite the fact that, compared to neighbours, Chile is considered to be a wealthier country with its standard of living approaching that of Spain, here, too, we see some local fiat to crypto movements. Likely as a result of the economic crisis that started last year, the Chileans spent close to 150 million pesos on Bitcoin last week, which is roughly the same figure as the one shown by Argentina, around a quarter of a million US dollars.

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What comes next is yet to be seen. One thing is self-evident: as of today, South Americans seem to have more faith in cryptocurrency than the rapidly-becoming-valueless paper money issued by their Central Banks.

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About the author

Alexander Goborov (MSc) is U.Today’s chief editor of analytics. Before joining our publication, he worked in research and education, and, briefly, as an academic ghostwriter.

His articles range from scientific to creative, among them those that came out in Journal of Language Learning, St Petersburg Times, and Kommersant.

At U.Today, he and his team specialize in the economic analysis of the Blockchain market, infographics, as well as interviews.

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Bitcoin Price Could Drop to $2,000 or Even to $200, According to Peter Schiff

  • Alex Dovbnya
    📰 News

    Peter Schiff thinks that the Bitcoin price could possibly drop another 90 percent after plunging to $2,000

Bitcoin Price Could Drop to $2,000 or Even to $200, According to Peter Schiff
Cover image via www.123rf.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Contents

Euro Pacific Capital Peter CEO Schiff, who is particularly famous for being a relentless crypto hater and claiming that the top coin has less utility than a tennis ball, recently took to Twitter to share his new BTC price prediction, and crypto Twitter got riled up.  

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Schiff becomes a Bitcoin chartist

The gold bug predicts that the BTC price could drop below $2,000 given that Bitcoin was about to form the bearish head and shoulders pattern. However, multiple prominent crypto traders were quick to question Schiff's skills in technical analysis. Particularly, Josh Rager explained why his forecast was flawed. 


When one Twitter user saw the silver lining in Schiff's uber-bearish prediction and expressed his desire to buy the dip, the gold bug said that BTC price could "easily" drop to as low as $200, thus doubling down on his bearishness. To put this into perspective, Bitcoin hasn't this price level since Oct. 2015.   

Crypto Twitter started spamming the thread with the "Remind Me Tweets" bot to make Schiff once again eat his words. 

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More bearish predictions

As reported by U.Today, Schiff forecasted that the BTC price could drop to as low as $4,000 right after the top coin's 20 percent drop to the $8,000 level. That bearish call is yet to become a reality, but Peter Schiff is not the only one who expects another price drop. 

Veteran chartist Peter Brandt also claimed that the BTC price could drop to as low as $5,500 before rallying to up to $50,000

Meanwhile, trader Alessio Rastani thinks that the crypto king could end up below $2,000 if his "wild card" scenario gets invalidated and bears gain the upper hand. 

Will Bitcoin experience another major drop? Share your take in the comments! 

Subscribe to U.Today on Twitter,and get involved in all top daily crypto news, stories and price predictions!

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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