Bitcoin Trading Reaches All Time High in Venezuela Amidst Ongoing Economic Collapse

Bitcoin trading volumes in Venezuela have reached a new all-time high amidst massive hyperinflation and an ongoing presidential crisis, tech news outlet TrustNodes reports Feb. 6.

The recorded trade volumes on LocalBitcoins are just a fraction of overall estimated Bitcoin trading by Venezuelans.

As TrustNodes reports, a large amount of trading is taking place on centralized exchanges located in neighboring countries, such as Colombia and Brazil.

The total value of Bitcoin trading volumes by Venezuelans is difficult to estimate since trades are often made in local currencies of the neighboring countries.

Trading volumes on LocalBitcoins have also seen a spike in Colombia, with the two countries together accounting for 85 percent of trading volumes on the p2p exchange in Latin America, as Cointelegraph en Español reported Feb. 5.

During the first five weeks of 2019, Venezuela has reportedly seen 8571 transactions, while Colombia saw 1709 transactions.

According to TrustNodes, the trading volume on LocalBitcoins in Venezuela has seen an over four-fold increase since summer 2018, while the inflation of the local fiat currency, the Venezuelan bolivar, has reached one million percent.

The economic situation in the country was worsened by the sanctions by the United States adopted in 2017, which targeted the regime of Venezuelan president Nicolás Maduro.

Last month, the U.S. announced additional sanctions against the country's state-owned oil company, PDVSA. The tension in the country has been increased by an ongoing presidential crisis since last month, when the country's majority opposition National Assembly declared Maduro's May 2018 re-election invalid.

On Jan. 31, Venezuela officially adopted a new bill on crypto regulation that introduces the concept of a sovereign crypto asset, which represents any currency issued in Venezuela and authorized by the government.