Bitcoin is Too Technical For Most Venezuelans to Use, Researcher Finds

Alejandro Machado, the co-founder of the Open Money Initiative (OMI), a project focused on researching how money is “used in closed economies” and “collapsing monetary systems,” has revealed that residents of Venezuela have not completely abandoned the Bolivar.

Although the Bolivar may appear to be practically worthless due to hyperinflation caused by rampant corruption and political and economic instability in Venezuela, Machado pointed out: 

No one wants [the Bolivar,] but people need it to survive.

Access To Products Is Severely Limited

According to Machado, Venezuelans may not be using other currencies or assets such as bitcoin (BTC) because of their highly technical nature. In order to spread awareness about the benefits of cryptocurrencies, particularly in areas affected by high levels of inflation, Machado’s non-profit organization, OMI will work with LocalBitcoins on various initiatives.

According to Machado:

Access to products is the number one thing. Do I have enough to eat this week or do I need to reinvent the ways that I access food?

While bitcoin trading in Venezuela has reached record-level highs recently, the majority of the nation’s residents are reportedly using the pseudonymous cryptocurrency for remittance payments and accepting it as compensation for freelance work.

Can’t Buy Basic Food Items With Bitcoin

Jamaal Montasser, the co-founder at OMI, recently commissioned a study involving 40 participants which focused on investigating how Venezuelan residents use money during times of political and economic uncertainty.

According to CoinDesk, a Venezuelan refugee, residing in Colombia, told the staff at OMI that a member of the national guard in Venezuela threatened to beat him. This, as he reportedly refused to sell coffee at rates determined by the nation’s government and priced in the Bolivar. Meanwhile, a Venezuelan, who is currently working in Colombia, has been smuggling US dollars (earned from work) back into Venezuela by hiding them in her hair and underwear.

Jill Carlson, another OMI co-founder, revealed:

The things that people wanted to buy, they couldn’t buy with bitcoin. You could find merchants willing to accept bitcoin for more high-end goods, but not for more basic or staple goods. You can’t go buy bread with bitcoin in Caracas.

Moreover, processing crypto payments is quite challenging because Venezuelan merchants that do take cryptocurrency usually only have one person who knows how to use a digital asset wallet.

Some of the main organizations supporting the OMI project include the Human Rights Foundation, Zcash Foundation, Cosmos, Tezos, and Stellar.

Bitcoin Continues Correction to the Downside Amid High Stakes — Price Analysis

Colin Muller
  • Short term trend: Good chance for an end to the downtrend soon
  • Medium term trend: Uptrend intact but coming under more pressure
  • Long term trend: Downtrend holding strong, unchallenged

As we correctly forecast here yesterday, Bitcoin (BTC) has completed its consolidation around $8,600 and continued to the downside in an extension of its correction from $9,100. It has entered clear support starting at about $8,200, and there is a decent chance of the correction find a bottom within that zone.

We start on the 4-hour and see that the drop in volume telegraphed today’s move down. The typical 3-wave movement of a correction is likely to find support above $8,140 or thereabouts, with support derived from recent resistance.

Within supportBTC chart by TradingView

The histogram is still pointing down hard at time of writing, implying that momentum is still to the downside and might take a bit more time to bleed off. Of course, all of this assumes that Bitcoin’s movement here is a simple correction and not a trend change; in other words, this assumes that the medium-term trend is still up, which may well turn out to be false.

If we take a look at the daily, we see that the scope for a retracement is liberal within the medium timeframe uptrend, starting on January 3. Price can come down to $7,700 without setting off major alarm bells within this market structure; down, namely, to the “golden pocket” .618-65 area of the Fibonacci scale.

Plenty of roomBTC chart by TradingView

We see that the RSI here is engaging a key inflection point on its scale, around 50%. Ideally, we’d like to see this hold and preserve a strong medium uptrend. The histogram looks alarming here, poised to cross over negative with a decent momentum. It is noteworthy that the last two times we’ve seen this, Bitcoin was bought up at the 11th hour and the medium uptrend preserved.

High stakesBTC chart by TradingView

Finally, moving to the weekly chart, we see the larger picture and the overall risky position that Bitcoin is in. The leading crypto has so far soundly failed to break out of the downtrend it's been in for seven months, and failed to surmount the important $9,100 mark.

At this point, it is threatening to again lose the 21-week EMA; and this would put the 55 EMA into serious question. This week is likely very important for setting Bitcoin’s trend in 2020 – and so far, things are not looking great.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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