The number of Venezuelan bitcoin users has doubled and the trading volumes of Venezuelan bitcoin exchanges have increased substantially since 2014.

A spokesman of bitcoin Venezuela told Panampost:

“The price [of bitcoin] never fluctuates at the same rate as the devaluation of the bolívar, which lost 60 percent of its value in one month.”

The country’s largest bitcoin advocacy organization stated that a significantly large portion of bitcoin buyers hold the digital currency, and they are not worried about its volatility. Instead, some are very optimistic on the value of bitcoin, and they are hoping to see a short-term increase over the next few months.

Venezuela’s official inflation rate hit 68% in 2014 and it is predicted to surpass 70% this year. In an attempt to escape the irregular volatility of the nation’s currency, Venezuelans have been desperately trying to purchase foreign currencies, especially U.S. dollars, on the black market, explained Venezuelan economist Luis Oliveros.

Due to the government’s strict control on the purchase of foreign currencies and the plunge in supply, people there are shifting towards Bitcoin. With the rapid devaluation of Venezuela’s national currency, and people’s attempts to escape hyperinflation, the cryptocurrency has risen as a solution.

Trading Volumes

SurBitcoin, the first Venezuelan bitcoin exchange, was launched on August 15 of last year by BlinkTrade co-founder Rodrigo Souza.

The platform is still in beta, but the trading volume of the exchange has increased rapidly over the last ten months. Bitcoin Venezuela reported:

“The SurBitcoin exchange is already the second largest in transaction volume in Latin America after Brazil. The growth is evident.”

Because of the increase of bitcoin buyers and the hyperinflation of the nation’s currency, several local businesses in Venezuela — including restaurants, coffee shops and shopping malls — have begun to accept bitcoin.

WSJ reported in late 2014 that hyperinflation forced Venezuelans to carry piles of bills to purchase small goods like a cup of coffee, thus making it extremely inconvenient to carry cash and leaving people prone to robbery and theft.

While bitcoin adoption and awareness in Venezuela is still relatively low compared to neighboring countries such as Argentina, bitcoin may be the ultimate solution to Venezuela’s current situation, if the number of bitcoin buyers, traders and merchants continue to grow at present rates.