Consignments may be the most common use in Latin America for Bitcoin. This is clear from the analysis of regional exchange data through the platform peer to peer LocalBitcoins in the last 60 days.
Last March, coinciding with the beginning of an electricity crisis in Venezuela, volumes of bitcoins have refuse in all the countries of the region that use this platform. The drop reached about 20% in countries like Peru, where there is currently a large community of Venezuelans who could be using the BTC to refer their families.
Venezuela in the regional bitcoins market
Venezuela, the leading country in operations through LocalBitcoins in Latin America, has become the dominant market in the region due to the large volume registered each month. The number of transactions through this platform on Venezuelan soil, puts you in the second overall since October 2018, second only to Russia.
Venezuelans have used bitcoins as a haven of value despite the volatility of their prices due to a prolonged economic crisis that led to hyperinflation as of November 2017. Since then, inflation rates have continued to rise, going from a year rate to-year from 1,370% in December of that year, to 2,295,981.8% in 12 months, the latter calculated at the end of February 2019.
In these circumstances, the South American country showed a 630% increase in its operations at LocalBitcoins in a year. The volume of exchange, which was 1,138 BTC in February 2018, reached a record of 8,311 BTC in February this year. These levels represent 60% of regional trade in bitcoins through the platform peer to peer.
The number fell only in March, when a series of generalized outages in Venezuela's electricity service cut the increase in conglomerate transactions in Venezuela. This situation has 43% in the volume of weekly commerce and 26% in relation to the month of February. It also dragged all the countries of Latin America, which in recent years have received a significant number of Venezuelan migrants.
Migrants use bitcoins
According to data from the International Organization for Migration (IOM), by February 2019, an estimated 3.4 million Venezuelans are refugees or migrants abroad. From this number, 2.7 million (79%) live in Latin American and Caribbean countries.
Colombia is the Latin American country with the largest number of Venezuelans living in its territory, with a total of 1.1 million. It is followed by Peru, Chile and Ecuador, which report 710,000, 288,233 and 250,000 people, respectively.
Peru was the third country with the biggest decline in bitcoin operations in March, after Venezuela and Mexico. The Peruvian Exchange in LocalBitcoins lost 208 BTC (19.5%) in relation to the month of February.
In Colombia, the decrease in transactions in local currency was 6.5%, despite being the South American country where the largest number of Venezuelans live. However, it should be noted that there is also an important Colombian migration around the world, which could be using bitcoins to process shipments. This circumstance would explain why the fall in trade in Venezuela affected the Colombian market to a lesser degree.
In turn, Chile, another of the countries with the largest reception of Venezuelan migrants, saw its bitcoins exchange rate fall 9.5% last month. These numbers suggest that the Venezuelan diaspora is buying bitcoins in local currency in the different Latin American countries where it is located, to send them to recipients in Venezuela. In this way, a transaction record is generated in LocalBitcoins in both places, which is reflected in the platform statistics.
Featured image by Wit / stock.adobe.com