It’s been quite apparent over the last few months that Venezuelans are turning to cryptocurrency at an exponential rate as a safe haven for their wealth and investments in their crisis-stricken economy.
As the value of the Bolivar collapses, the country’s citizens are turning in droves to Bitcoin and other cryptocurrencies as hedges against currency collapse.
New data from investing.com suggests, however, that it’s not just Venezuelan citizens that are turning to cryptocurrencies as fiat currencies collapse.
The investment portal researched the top ten countries accessing cryptocurrency across its platform and noticed an interesting trend.
Citizens of countries with failing currencies in every part of the globe seem to be turning to crypto for investment and wealth protection, even amid the chaotic struggles of fiat currencies.
- Venezuela - 36%
- Colombia - 18%
- Argentina - 15%
- Belarus - 13%
- Ukraine - 11%
- Brazil - 11%
- Germany - 10%
- UK - 8%
- Egypt - 7%
- Russia - 6%
The five countries with the worst-performing currencies of 2017 are Venezuela, Argentina, Belarus, UK, and Egypt, and all of them made it onto the top ten list.
Each country's currency rates were based on their current state of affairs including elections, political turmoil, the price of oil, recessions, and other factors.
Financial collapse means crypto boom?
The huge number of investors turning to cryptocurrencies in these fiscally challenged countries may be a major factor driving the exponential rise of Bitcoin and other cryptocurrencies over the past month.
Even as these struggling economies fight to regain stability of their fiat currencies, the prices of digital currencies have been moving higher. The influx of huge amounts of cash from depressed regions into cryptos may well be the cause of the boom.
While tensions in North Korea and Japanese demand have been substantial factors, the coinciding economic collapse in different countries may well play a major role as well.
As these countries have faced financial crises, and a need for better store of value is being sought, access to Bitcoin is becoming easier every day.
Companies like CryptoPay and Coinbase are offering exchanges that allow for fiat to crypto exchanges in these regions.
What’s more, the proliferation of Bitcoin ATMs around the world has created a system of access points for Bitcoin that has broadened consumer access.
While the massive increase in price may retract over time, the mainstream acceptance of cryptocurrencies will only drive demand further.
Viable store of value
While these countries are, by and large, smaller world economies, it stands to reason that all fiat currencies act as price drivers for Bitcoin and other cryptocurrencies.
As currency prices rise and fall around the globe, the decentralized nature of cryptocurrencies frees them from governmental influence and political gamesmanship, and therefore makes them a safe haven investment for the global marketplace.