Bitcoin Demand in Economically Volatile Countries Reaching Record Highs

  • Peer-to-peer trading platform LocalBitcoins saw its highest volume in 2015 at 39,496 in mid-October when BTC was trading at $250.

Established in 2012, the platform has been a popular peer-to-peer exchange has been seeing a serious drop in its trading volume since May 2019. This decline was triggered by a slump in BTC price that was registered on other exchanges as well.

Source: Coin Dance

Another reason for this drop could be the popular platform tightening the KYC/AML measures. As per the requirements of new Finnish law, LocalBItcoins implemented new user verification procedures, that came into effect on Sep. 1.

On exceeding an annual trading volume limit (for instance, 1000 euros) users need to go beyond providing their name, phone number, email, and country of residence and complete the KYC procedure that asks for an identity document.

Last June, the P2P platform also scraped the option of buying and selling BTC in person that could have been another factor contributing to this slump.

However, it remains a popular choice in countries like Russia, Venezuela, Nigeria, Argentina, Colombia, and Hong Kong where it is recording great volume increases. Commentators claim this is because Bitcoin is used as a hedge against inflation and economic volatility in those countries.

In November, LocalBitcoins registered another record volume in Argentine Peso.

Other countries that also has also been recording an uptick in demand for BTC on LocalBitcoin in the last few weeks include Chile, Dominican Republic, and South Africa.

Recently, while celebrating Bitcoin’s 11th birthday, Coinbase released a report where it noted that demand for bitcoin in regions that are economically volatile have been seeing new highs in 2019.

LocalBitcoins experienced premium prices and surge in volume in Venezuela, Argentina, and Hong Kong, regions that experienced high economic volatility this year. While Venezuela and Argentina’s economies are being wracked by capital controls, corruption, and inflation, Hong Kong is going through political dysfunction.

When it comes to the largest markets on the platform by volume, Russia is in the lead. Other countries on this list are the USA, China, the UK, Nigeria, Venezuela, Colombia, Australia, India, and South Africa.

Bitcoin Weekly Trading Volumes since 2017. Russia and Nigeria 🧐🧐 from Bitcoin

The fact that the world’s leading cryptocurrency is a deflationary asset, it makes sense that these countries would take special interest in Bitcoin. Additionally, countries like Nigeria also find BTC a lucrative low-cost option when sending money to their families across borders.

Bitcoin as a hedge against currency inflation, economic volatility, political turmoil, and central bank policies has been gaining traction over the years. And the above-mentioned data validate Bitcoin as a sound form of money.

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Author: AnTy

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