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Bitcoin Trading in Venezuela: A Complete Guide

November 6, 2018

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Bitcoin Trading in Venezuela: A Complete Guide

Since early 2014, Venezuela’s economy has in a steep decline and as of November 2016, it had entered into a state of hyperinflation; the bolivar has depreciated in value so much that Bitcoin has become an extremely popular means for the population to circumvent the economic crisis and survive.

For consumers in Venezuela, consumer prices have leaped almost 500,000 percent according to estimates and furthermore, the government recently issued a 100,000 bolivar note, which at black-market rates was worth less than 50 US cents.

Cryptocurrency research firm Diar found that monthly bitcoin trading volumes had risen from approximately $1 million USD in January of 2017, to around $17 million USD in August 2018, falling in line with when Venezuela’s inflation surpassed 50% per month in November 2016.

Empowerment with Cryptocurrencies

As a result, cryptocurrencies such as bitcoin and Dash have become staples in the damaged economy and additionally, over-the-counter (OTC) cryptocurrency trading services such as CoinCola have become an essential part of this movement with thanks to their ease-of-access and simplistic peer-to-peer (P2P) trading platforms; statistics provided by Coin.Dance display the exponential growth of bolivars exchanged for bitcoin on OTC platforms.

Venezuelans are opting to store the value of their currency on platforms such as CoinCola as they provide an immediate way for users to switch from bolivars to crypto, and vice versa. The reason being that because the bolivar is in such sharp decline, spending in Bolivar has to be done as quickly as possible, making OTC solutions an essential part of an individuals economic strategy.

Dash is the latest cryptocurrency to proactively engage the crisis by rolling out several services and promotions to aid local businesses and consumers; presently around 2000 merchants now utilize Dash in their grocery stores, restaurants and so on.

According to the Centre for Strategic & International Studies (CSIS), charitable cryptocurrency technology initiatives such as EatBCH and Bitcoin Venezuela have significantly eased the strain by taking cryptocurrency donations and providing food to thousands of Venezuelans daily.

State-Backed Crypto

In January 2018, the Venezuelan government launched an initial coin offering (ICO) for its own cryptocurrency, the Petro. The token was introduced to curb hyperinflation and circumvent sanctions posed by the United States and was released on the pretense that it was backed by the nations gold, mineral and oil reserves, with a single token pegged to the value of an oil barrel which at the time, was worth approximately $59 USD.

After issuing 100 million petro tokens and claiming to raise over $5.9 billion USD, the government was soon under fire by experts who claimed that there were no independent audits of the ICO, and zero evidence to suggest that the material backing for the Petro token even existed.

Buying Bitcoin with CoinCola

The value of bitcoin in Venezuela is hard to accurately represent as the lack of faith in the country’s central bank, Banko Central de Venezuela, which has caused for a Bolivar to USD black market to emerge and thrive. Black market rates in August were anywhere between 65 and 100 bolivars per dollar with exchange rates sitting at around 64 bolivares per USD.

Official numbers sit somewhere astronomically higher, with 1 USD being worth approximately 248,471.2248 bolivars, making the value of 1 bitcoin 1,346,686.58 bolivars according to converter calculator to BitVen.

As noted earlier, OTC solutions are becoming a critical tool for Venezuelans and CoinCola has been working tirelessly to ensure that the platform is providing the maximum benefits it can to those seeking control of their finances.

The CoinCola platform comes with an OTC marketplace that has zero fees for buy and sell orders made, charges only occur if users create a buy/sell advert and complete a trade that way. From now until November 30th, CoinCola is offering users in Venezuela a reduced OTC transaction fee of 0.5% on advertised trades. (Fee normally 0.7%).

Furthermore, it is free to deposit cryptocurrency assets into a CoinCola wallet, which can then also be traded on the CoinCola exchange, which has trading pairs for six popular cryptocurrencies including Dash, Ethereum, Tether, Litecoin and Bitcoin Cash.