Last week two South American markets led a surge in bitcoin buying. One of them was Argentina, and the other was Venezuela.
Venezuela traded 142.9 billion sovereign bolivars (VES) last week, while Argentina managed 19.4 million pesos (ARS). These are record amounts for the two countries, although it perhaps didn’t have a massive impact on bitcoin overall. Furthermore, as Cointelegraph says, “In Bitcoin terms, however, the trading period did not see a noticeable uptick in volume, proof that both countries’ currencies are continuing to weaken. Venezuela traded 627 BTC ($5.5 million), while Argentina’s tally totaled 30 BTC ($263,000).”
Inflation is a major problem for both South American countries, with Argentina’s change of government only serving to make matters worse for the economy.
And in Argentina, the country’s central bank formally banned consumers from purchasing Bitcoin and other cryptocurrency using credit cards.
Mauricio Di Bartolomeo co-founder of Bitcoin finance startup Ledn, summarised the situation in Venezuela as, “Printing physical worthless money is expensive and has challenging logistics. This is why Venezuela is going ‘Petro’ — to screw the people out of their savings in real-time, with no printing costs at all.” He also said, “The Venezuelan Petro is everything that bitcoin stands against.”
Furthermore, according to the Financial Times Venezuela is having to sell cheap blends of oil at a significant discount due to the mounting impact of United States’ sanctions on the government, resulting in oil revenues falling to just $250 million per month, compared with up to $5 billion prior to the financial crisis.