Statistical analysis has shown that the exchange of Venezuelan bolívars to bitcoin hit an all-time high in early August 2019.
Throughout the first few months of 2019, the Venezuelan bolívar has undergone a period of severe hyperinflation, with the International Monetary Fund (IMF) predicting that the inflation rate would go up between 1 and 10,000,000 percent over the course of the fiscal year.
As a result of this economic instability, cryptocurrency has become a relatively stable store of value, compared to the tumultuous conditions of the economy. In addition to private citizens becoming users of bitcoin and other crypto assets, the Venezuelan government itself has both launched its own state-backed coin and has tested pilot programs for massive bitcoin transfers.
These economic conditions seem to be contributing to a massive upswing in the adoption and use of bitcoin within the nation. Data from Coin Dance shows that the exchange of bolívars to bitcoin on LocalBitcoins.com has increased dramatically, with the current exchange rate posting at more than five times what it was at the beginning of the year. The number of bolívars exchanged for bitcoin has risen by nearly 20 billion in the last month alone.
Further analysis from Coin Dance shows that Venezuela is not the only country to reach its all-time high in trade volume within the last few weeks. Several other nations, such as Colombia and Argentina, have seen the volume of trades from local currency to bitcoin spike in the same time period as Venezuela.
Of particular interest to this trend is the fact that all three of these nations are experiencing a period of inflation at the same time. The Colombian Central Bank announced that inflation was likely to exceed target goals in late July. And Argentina has seen a direct correlation between public confidence in the peso and the use of bitcoin.