Venezuela became one of the Biggest Markets for Crypto in the World
Venezuela has been living with hyperinflation since at least 2014. Its national currency — the Venezuelan bolívar — hit an official inflation rate of 57.3 percent in February 2014, while independent currency analysts were reporting that, by that September, the real inflation rate had already topped 100 percent. In other words, the bolívar (VEF) was depreciating rapidly in value, and ordinary Venezuelans needed something to fill the void it had left as a one-time viable means of exchange.
By definition, hyperinflation is a state in which, as described by the International Accounting Standards Board, “the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency.” However, due to capital controls that had been in place since 2003, Venezuelans were restricted in their ability to obtain U.S. dollars or any other foreign currency. They had no freely accessible outlet for their devalued VEF, with the Venezuelan economy expected to contract in 2015 by 1 percent, according to the IMF.
It was into this economic quagmire that Bitcoin and altcoins (particularly Dash) entered, providing struggling Venezuelans with stores of value and mediums of exchange they could rely upon more than the nosediving bolívar. Ever since 2014 and the onset of hyperinflation, they’ve seen marked increases in ownership and trading, with impressive rises being witnessed in the past few months, as Venezuelan inflation topped an eye-watering 46,000 percent and as the IMF predicted an inflation rate of 1,000,000 percent by the end of 2018.