Data from Coin Dance indicates that bitcoin trading volumes on the peer-to-peer platform LocalBitcoins in the month of October 2018 have reached record highs in Argentina, Egypt, and Venezuela for broadly similar but contextually different reasons.
Crisis in Argentina and Venezuela
Enduring economic crisis in Argentina is a very probably accounts for why many people have opted for the Bitcoin as a valuable haven for their wealth. Argentina’s Peso has dwindled in value by a devastating 52 percent against the dollar in 2018, considerably diminishing the buying power of residents.
Bitcoin has stepped into the vacuum as a viable alternative to the Peso, offering relative stability to the country’s squeezed middle classes. The Argentine Central Bank has even relaxed regulations to allow for more BTC ATMs in the country in an attempt to spark the country’s economy into life.
As a result, BTC payments have become commonplace in the country. Despite these efforts, the country’s economy does not look any closer to a recovery anytime in the near future, which serves to reinforce the conditions that led to the increased popularity of bitcoin. Bitcoin adoption in Argentina is now at an all time peak, with trading volume nearing $9 million.
The well-publicised Venezuelan economic crisis has made bitcoin adoption in the country inevitable, with new BTC trading volume records being reached practically on a daily basis in the country. Coin Dance data reveals that regardless of price dips, Venezuelans are among the world’s most prolific bitcoin users. The country’s total peer-to-peer bitcoin trading volume for October 2018 is put at about 900 million bolivars ($14.4 million).
The government meanwhile has intensified its efforts to promote the Petro – a state-issued cryptocurrency backed by the country’s petroleum reserves – even mandating payments for travel passports be made using the Petro. Bitcoin however remains vastly more popular despite these attempts to piggyback on crypto’s popularity by the government.
Egypt’s Curious Case
Unlike Argentina and Venezuela, Egypt is not suffering a major economic crisis at the moment and the Egyptian Pound is relatively stable, but Egyptians have achieved a bitcoin trading volume in excess of one million Egyptian Pounds.
A possible explanation for this phenomenon is that Egyptians are increasingly distrustful of their government and its ability to control the country’s fiat currency. It will be recalled that in 2016, the Egyptian government reached an agreement with the IMF to remove the Egyptian Pound’s US Dollar peg and liberalize its forex markets, which resulted in a 48 percent devaluation of the currency.
Many younger Egyptians who may be dissatisfied with the perceived heavy handed tendencies of the country’s government, headed by ex-military dictator Fatah el-Sisi may be choosing to carry out transactions or hold their savings off-grid.
In most of South and Central America, BTC trading volumes have continued to increase with October 2018 figures far above the year average in Chile, Colombia and Mexico. It is the opposite in Europe with trade volumes reducing having peaked in the first quarter of the year. Croatia and Switzerland experienced their lowest trading levels this month.