Bolivar-to-bitcoin trading in Venezuela skyrockets to a new all-time-high. | Source: Shutterstock
The number of Venezuelan Bolivars that were exchanged for Bitcoin last week hit a new all-time high as the International Monetary Fund (IMF) projected that Venezuela will experience the world’s highest inflation rate in 2019.
During the week that ended on August 3, the number of Venezuelan Bolivars that were exchanged for Bitcoin rose to nearly 67 billion. The previous record was nearly 58 billion and this was recorded a little over a fortnight ago, according to Coin Dance.
Per the Associated Press, the IMF is projecting that Venezuela’s inflation rate will hit nearly 1,000,000 percent by the end of this year. As a deflationary currency, the demand for Bitcoin in Venezuela might be partly driven by those looking to escape the hyperinflationary conditions. And of course, cryptocurrency acceptance in commerce is growing in Venezuela.
The projected inflation rate is, however, more tolerable relative to what had been forecast four months ago. In April, the IMF had projected that Venezuela’s inflation rate would hit 10,000,000 percent but have now lowered the forecast to about a tenth of that. Per the IMF the lower inflation rate is due to the Venezuelan central bank, Banco Central de Venezuela, raising the reserve ratio for the country’s local banks.
Besides acting as a store of value, Bitcoin could also be serving as a means to transfer value across borders while avoiding government controls. This is especially so as Venezuelans continue to flee the country. The IMF estimates that Venezuela’s emigration levels could reach five million people before the close of 2019.