Venezuela is experiencing something quite unusual right now. As a severe hyperinflation rate is haunting the country, locals have started using more and more of Bitcoin, and as a result, the price of a token is also touching high records in the country.
Horrifying 86,857 Percent Annual Inflation in Venezuela
The inflation right now in Venezuela is simply insane. Just about a year ago in Venezuela, if you would want to buy a cup of coffee, it would have cost you 2,300 bolivars, i.e. the local fiat currency. But as of now the same cup of coffee will cost you around 2 million bolivars. The impact of inflation in the country, is both terrifying and unbelievable.
Unfortunately, the problem doesn’t seem to end there. The International Monetary Fund (IMF) expressed, the inflation rate will hit over 1 million Percent by the end of 2018. In other words, the present inflation rate in the country is doubling every 18 days.
The majority of people in the country are living in poverty because they have to spend an astronomical amount of money on their day-day resources like bread, eggs and flour.
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Bitcoin as the ultimate Way out?
The hyperinflation in the country is causing a Bitcoin purchasing spree, and the price is rising each week. The trend is increasing at rampant rates, and the value of Bitcoin trade has more than doubled, reaching up to 17 trillion bolivars worth of BTC in this week alone according to an official firm.
During the time of this report, the price of Bitcoin is just under 1 billion bolivars and will gradually overcome this soon. Although the actual exchange rate in the country is unknown, the Banco Central de Venezuela (the international central bank) has become an unreliable source of data for the inflation, so that can be even bigger now.
The increase in the traded volumes of BTC in the country, however, indicates that the locals are looking for other ways of storing value amidst the crisis. As the hyperinflation is on a rise, Bitcoin seems like a way out, as it only increases in value along with the inflation. However, things are not good right now, and no one knows how it will turn out until next year.