Venezuela: Where Bitcoin Trading Reflects Survival Rather than Choice

14 Pages Posted: 16 Sep 2019

Date Written: September 7, 2019

Abstract

An analyse of bolivar/bitcoin trading activity indicates that Bitcoin trading in Venezuela is more a reflection of a survival technique rather than an investment strategy with the median transactions price significantly smaller than the medians in the Argentine peso, the Brazilian real and the UK pound. A large number of very small trades point to the practice of exchanging only as many bitcoins as is necessary for immediate use, with inflation as high as 3-4%/day. An analysis of the size of transactions in bitcoins also points to much smaller bitcoin transactions in the bolivar compared to the peso, real and pound. While Bitcoin transactions in the real and the pound indicate a range of trading opportunities from small to large transactions, peso/bitcoin transactions indicate a currency that may be at the start of a journey not dissimilar to the bolivar as transactions start to get smaller in 2018. This analysis supports the anecdotal evidence that bolivar/bitcoin trading is used as a survival technique in a country with a failing economy and worthless fiat currency

Keywords: Venezuela, Bitcoin, Brazil, Argentina, Survival trading

JEL Classification: G15, G01, H12

Suggested Citation

Johnson, Jackie, Venezuela: Where Bitcoin Trading Reflects Survival Rather than Choice (September 7, 2019). Available at SSRN: https://ssrn.com/abstract=3449589 or http://dx.doi.org/10.2139/ssrn.3449589

Jackie Johnson (Contact Author)

Johnson Research, Perth ( email )

PO Box 440
Bullcreek, WA 6149
Australia

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