When Satoshi Nakamoto penned the Bitcoin whitepaper 11 years ago, almost to the day, the goal was clear: Replace the existing centralized financial system with a currency of logic, not power. Traditional fiat currency, which was left broken in the wake of the financial crisis of 2008, was the main economic opposition to be replaced by the world of cryptocurrencies.
Now, in regions where fiat is showing signs of weakness, Bitcoin is taking over. As countries feel the wrath of disastrous economic policies, political tensions are causing surging inflation and their citizenry is looking to the world of decentralized finance where such externalities do not affect what’s in your wallet, or your cold wallet.
Citing data from LocalBitcoins, @CryptoWelson pointed out that countries which are facing growing volatility are also registering record inflows into Bitcoin, with a surge in their fiat-to-Bitcoin volumes. Three regions, in particular, were cited by the analyst – Venezuela, Hong Kong, and Argentina.
Demand for #Bitcoin in economically volatile regions reached record highs in 2019.
Since 2013, volumes on Argentine peso, Hong Kong dollar, and Venezuelan bolivar bitcoin pairs have exceeded $600 billion in total value. pic.twitter.com/atKadtWjb3
— CryptoWelson 📊 (@CryptoWelson) November 1, 2019
The most skewed chart comes from South America’s Venezuela. Owing to the disastrous policies of Nicolas Maduro’s socialist government, the Venezuelan bolivar [VES] has been in a severe slump. @CryptoWelson stated that in 2019 alone, over VES242 million worth of Bitcoins were exchanged for the South American fiat currency.
According to the chart by Coin.Dance, the LocalBitcoins volume from Venezuela began to shoot up in October 2018 and peaked in June 2019, surging to as high as $120 million in Bitcoin.
South America has another member joining Venezuela in its fiat-to-Bitcoin woes: Argentina.