In Venezuela, which is permanently plagued by crisis, Bitcoin trading on the P2P platform LocalBitcoins reaches a record volume at the weekend, thus calling the US government into action. The US government has now frozen all state accounts of socialist Venezuela in the USA and confiscated the assets. The dramatic escalation is a consequence of far-reaching diplomatic disagreements between the two countries. It also shows, however, how explosive Bitcoin & Co. have already become in world politics.

We regularly receive headlines about Bitcoin and crypto currencies in Venezuela. Besides Petro, the moderately successful state crypto currency from the pen of President Maduros, Bitcoin also has a strong standing in Venezuela.

Especially because the Venezuelan Bolivar can lose value in an unpredictable way, Bitcoin is a worthwhile alternative in Venezuela. In times of enormously fluctuating rates of national currencies, uncorrelated crypto currencies open up secure investment opportunities for citizens of crisis-ridden states.

The Coin Dance crypto website provides up-to-date data on weekly trading volumes on Bitcoin’s LocalBitcoins peer-to-peer bitcoin exchange in Venezuela’s Bolivar. On August 3, this value reached an all-time high. Bitcoin prices in Venezuela reached record highs due in part to hyperinflation in the country. Shortly after the announcement was made, the government of Donald Trumps in the USA imposed a de facto trade embargo on Venezuela and frozen Venezuelan assets in the USA.

Bitcoin’s success in Venezuela provokes US government

The all-time high of Bitcoin in Venezuela is part of a chain of events that seriously damaged the relationship between the two countries. The Venezuelan government recently imposed a business ban on American businessmen. Meanwhile, the USA wants opposition leader Juan Guaido to succeed Maduro. They also accuse the incumbent president of abusing power and violating human rights. With the trade embargo, the USA apparently puts Venezuela on a par with so-called „rogue states“ such as Syria, Iran and North Korea.

Bitcoin breaks records not only in Venezuela

Further research by Coin Dance shows a growing popularity of Bitcoin also in other countries. According to them, Venezuela is not the only country in which BTC is flying high. In recent weeks, some other countries, such as Colombia and Argentina, have shown increased Bitcoin trading volumes. What is striking about this analysis is that all three countries are in a phase of inflation. Obviously, crypto currencies – first and foremost Bitcoin – increase in use and popularity when there are stability problems with the national currency.