Bitcoin In Emerging Markets
By Lamium on Altcoin Academy
From its launch in 2008, one of bitcoin’s core use cases has been the adoption in emerging markets. While wealthier western economies have been blessed with relatively stable national (fiat) currencies and advanced banking services, 3rd world countries still cope with huge challenges in base-level financial services. Let’s dive into bitcoin & emerging markets fundamentals.
Argentina has a history of failed governmental & monetary politics, suffering great depressions during 1974–1990 and 1998–2002. Argentina is a prime example of growing bitcoin adoption in a low-trust environment. By LocalBitcoins data, the OTC volume has been steadily growing within the last years.
Argentine peso (ARS) collapsed 30,3% to record 65 per USD on Monday, after market-friendly President Mauricio Macri’s worse-than-expected performance in the country’s Sunday primary election. As the stock market tanked globally during the same timeframe, there was also speculation about emerging markets meltdown. EM typically falls to recession among the first ones during a paradigm shift.
Russia has historically been a strong OTC market for bitcoin, in fact, Russia was the strongest location for LocalBitcoins by volume data in 2018. While a developing and rich with raw materials and talent, Russia copes with challenges within local politics and corruption. With a population of 145 million people, Russia also represents a huge market for bitcoin adoption.
Venezuela, possibly the strongest OTC market for bitcoin globally, has continued its parabolic growth during 2019. Venezuela faces enormous problems with the country’s communist government, plagued with hyperinflationary Bolivar (VES) fiat currency.
The Venezuelan government also launched an oil-backed cryptocurrency called Petro (PTR). Launched in December 2017, it is supposed to be backed by the country’s oil and mineral reserves and is intended to supplement Venezuela’s plummeting bolívar fuerte currency, as a means of circumventing US sanctions and accessing international financing.
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