Different countries maintain different prices for bitcoin and other cryptocurrencies. The market price most people see is simply the weighted average from all countries combined. In Venezuela, it would appear the demand is growing significantly, pushing the perceived value per BTC to the five-digit range.
The Financial Issues in Venezuela
Anyone who kept a close eye on financial development will know Venezuela is not in a good place. Hyperinflation has plagued the country for decades, and things only get out of hand further as more time progresses. There is little to nothing the government and central bank can do to stop the financial onslaught.
To counter some of the problems, President Maduro introduced a national cryptocurrency a while ago. Known as the Petro, it is allegedly backed by Venezuela’s oil reserves. Since day one, there have been a lot of uneasy questions regarding this particular venture. There do not appear to be any new oil reserves to back the Petro, nor is there any real use or demand for this national currency either.
Things have gotten so dire that local residents in Venezuela struggle to find food and other day-to-day items. Prices for products and services continue to skyrocket virtually every day while the domestic fiat currency devalues even further. For many, the only solution is to try and diversify their financial assets. Bitcoin has become of great interest in the country, and that trend is not slowing down.
Spiking Bitcoin Prices
In a country where physical and digital cash is losing value regularly, the demand for alternative assets will become more apparent. Venezuela is a prime example in this regard, at least where bitcoin is concerned. The country has seen numerous spikes of BTC trading volume through peer-to-peer platforms such as LocalBitcoins.
What is even more remarkable is the price people are willing to pay per bitcoin. Given the current global market value of $7,145, one would not necessarily expect there to be a high premium in Venezuela. Things could not be further from the truth, however, as the current premium to be paid on top of the average bitcoin price is very steep.
So much even that the average BTC price in the country is now close to $9,500. That is over $2,000 worth in premium fees to simply get out of the Venezuelan bolivar in 2019. It isn’t the first time prices in this country spike so high, as Venezuela has always had higher prices for BTC across different P2P trading platforms.
If this growth keeps up, it will only be a matter of time until the bitcoin price hits $10,000 again. Unfortunately for most traders, that value will be reached in Venezuela only. The rest of the world will have to wait to see such values again for quite some time to come..