In an attempt to curb the extreme inflation rate of the Bolivar (the highest in the world) the Venezuelan government is going to devalue its currency by removing three zeros. Meanwhile, the locals look for a way out: while prices are rising through the roof, citizens are buying up bitcoins for bolivars, as evidenced by the data Localbitcoins. Submitted by website graphics perfectly illustrate this trend.
According to Reuters, the denomination is scheduled for August 4, and at this point, the banking industry must prepare new notes and the transaction system. However, it is unlikely that such actions by President Nicolas Maduro to help cope with hyperinflation: the international monetary Fund believes that this year consumer prices will grow by 14 000%. In such circumstances, many residents spend all their money on food.
In countries with developed economies cryptocurrency assets are mainly used for speculation. In States where the monetary system and financial structure collapse, bitcoin will become an alternate store of value.
We will remind that the Venezuelan government, which virtually destroyed the Bolivar, has launched its own cryptocurrency Petro. However, it is unlikely that investors will be able to trust the new currency more than the old one.