Yes, you read that right, Bitcoin is trading for roughly an 85% premium on the Zimbabwean Exchange.
However, it is not strictly because people are enamored with the currency.
There is major economic turmoil going on in the region, similar to what is going on currently in Venezuela.
Adding further to the price escalation is the fact that there is only one exchange trading Bitcoin in Zimbabwe, and that exchange is Bitcoinfundi:
How could this happen?
Several reasons actually.
First, it starts when a local fiat currency gets inflated into oblivion and loses most of its value. People have no reason to hold the local currency because it is basically worthless.
They begin hoarding things like gasoline, food, medical supplies, gold, and now Bitcoin (as well as several other digital assets).
Then, once that starts to happen and since there isn't many places for Bitcoin to trade in the country, it begins trading at a massive premium.
I know what you are thinking, arbitrage the Zimbabwean Exchange!
On first thought, I am sure many traders out there are trying to figure out how they can buy Bitcoin on a local exchange and then unload it on the Zimbabwean exchange.
Don't try it.
Most likely it won't work out how you are hoping it will. At least according to the few people that I have read about trying it:
The currency debasement and economic turmoil is not a new development in the region.
Zimbabwe has been dealing with economic problems and food shortages for some time now. The currency has been losing value against the dollar and most other currencies for years.
Bitcoin was proposed as a potential solution some time ago.
In fact, last year the Zimbabwe-based economist, Philip Haslam stated this:
"The thing about Bitcoin is once you import it into the country, you don't have the problem of the currency eroding and perishing like you have with notes. It's a system that allows for privatized banking."
(I used to coach a young man named Philip Haslam on my golf team several years back, perhaps there is some relation here. I will have to look into the name a bit.) :)
Haslam's idea is not that outlandish of an idea, especially when you consider that most fiat currencies have an average life span of 27 years. Roughly every 30 to 40 years fiat currency fails and has to be retooled.
No wonder Bitcoin is looking so interesting to people.
Deflationary money can't work, can it?
Economists tell us that we have to have inflationary money in order for the economy to function the most effectively and effeciently. However, people seem to be flocking to deflationary money as they feel like they can't ever stay ahead of the inflation game.
Especially in areas were turmoil breaks out.
Bitcoin may never catch on as a de facto currency, but it certainly could turn into a form of digital gold that works very well as a store of value.
If that is the case, and Bitcoin captures just 5% of the current gold market, we are looking at $25,000 Bitcoin.
If it gains traction with some form of currency use as well, well you do that math on where it could go...
Stay informed my friends.
Sources:
https://community.fidorbank.uk/groups/bitcoin-education/the-average-life-expectancy-fo
https://news.bitcoin.com/bitcoin-prices-skyrocket-on-zimbabwean-exchange-during-economic-turmoil/
Image Sources:
https://news.bitcoin.com/bitcoin-prices-skyrocket-on-zimbabwean-exchange-during-economic-turmoil/
https://millennialmoola.com/2016/07/19/seriously-consider-replacing-all-your-bonds-with-tips/
Follow me: @jrcornel
The thing is, according to the screenshot of someone who tried to use the exchange there is no trading volume. There are no real human buyers who want to get into bitcoin.
@geronimo this happens sometimes with EtherDelta, I see the price of a certain asset skyrocket by 400% and when I go to markets etherdelta is there and when I go to the exchange it looks like a manipulation of one trade made very expensive. I do not know who is making this. Thanks for sharing. @gold84
I sent over 85. in BTC just to test it. Sold for 123. lol
hey?
were you able to withdraw the 123$ from bitcoin fundi?
Maybe I am missing something, but if I was in Zimbabwe and I needed to buy bitcoin, I'd just buy it on Bittrex or some other exchange. Or is the issue with converting Zimbabwe fiat into bitcoin. Ah, that's probably it.
Guys, Zimbabwean dollar has values. Old 100 trillion dollar is sold for $60 and 10 trillion dollar for $20. Want to be RARE trillionaire buy one of those. With history 1000000000X inflation, selling BTC for ZDollar make no sense.
I wonder how many traders end up with millions of worthless zimbarbewean dollars!
especially digital worthless zimbarbewean dollars which will be hard to send to an zimbarbewean bank account.
Inflation is the worst issue.
Bitcoin has inflation too, so is it also an issue?
OK but one dollar value compared with one bitcoin value. Who will win?
I just wanted to point out that inflation is not the worst issue. Bitcoin has inflation and it grows in value. Bitcoin is superior compared to fiat in a lot of ways.
So, bitcoin wins.
for those who are not prepare it is.
First person who have this good comment.
Hope your crypto bank is balanced.
The cause for this unusual trading is attached to their economic problem. Zimbabwe economy facing hyperinflation and economic insecurity. still one of the major cause of bitcoin surge is economic turmoil ..political instability.
But this is literally the biggest indicator for success. Can you imagine a time where there are no geopolitical uncertainties and political instabilities?
Yes, you can see that when Bitcoin seems to catch even more of a bid at times when there is geopolitical uncertainty.
I've been hearing about this for the last few weeks. As I understand it, this would be a good move for Zimbabwe simply because the currency isn't being controlled by a centralized authority.
On the other hand, it will not solve their problems immediately. I love that you sourced this article, gonna have to look into this a bit more!
Keep up
aTone
Yes, it is helping local citizens preserve more of their wealth.
I think this is currently one of a few arguments to buy bitcoin/cryptocurrencies and the fact that you can hide it much better then gold or any other "stable" asset.
am just thinking,if am zimbabwean with an internet connection, why would i buy on that exchange when i can as well buy on other exchanges that sell for less. there are exchanges that accept credit/debit cards i guess.
but no other exchanges accept zimbabwean money. So if you want to get rid of it for USD, you still going to pay a premium. With those USD, you could try to buy Bitcoin with it but if you don`t have a bank account who can hold USD you are screwed.
It is not that easy.
@jrcornel do you mind if I share this article to my blog off-site? I would run the first paragraph and link back to your article on STEEMIT and your profile. Let me know.
Still waiting for that $5,000,000,000,000 I was promised from my long lost fourth cousin who was a Nigerian Prince. I'm gonna buy all the Bitcoin then...
lol @cassandraf, I wonder if he was related to the diplomat who died with millions locked away where his poor wife couldn't get to it and she was willing to share some of the millions with me if I would only open a joint bank account and deposit a few tens of thousands to help with the legal expenses to get the funds released -
sadly I'll never know as I didn't hear back from my request to her to send a couple hundred dollars to fund opening the joint bank account, life is fun.
Resteemed. My wife is Zimbabwean, I know something about this bankrupt country that is using the dollar since decades now due to the failure of the zimbabwean currency. I am not really convinced that Mugabe will allow a currency that potentially could help the country to come out from the blackhole in which he put it. Recently if I'm not mistaken they were messing with bond notes. Thank you for your insight @jrcornel!
They will continue to be plenty of fraud and stupidity... Resteemed and Upvoted.
hay that's gud time to buy some bitcoin at that exchange @jrcornel.
Or, perhaps sell some that you bought for $4200 on a local exchange ;)
UPVOTEhii @jrcornel, valuable informations shared about Bitcoins and also position in zimbabwe. helpful for trading. thanx for sharing.
i agree with villainy and thanks for that infos followed and upvoted babe <3
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Thats interesing
Be aware of that speread discrepencies
Pretty similar to whats happening in Venezuela to be fair
Sometimes and "opportunity" ain't really an opportunity. :-) Interesting news either way.
I had plans to sell on a Zimbabwe exchange at the start of the post;
like the majority!
Sigh.
You know I wish that I owned this bitcoin company, and I could have had a contract with steemit that I will give .001 bitcoin to each article posted on steemit , but some informative article , not some bullshit :-P
I think too many people are getting into the crypto currency thinking of only super short-term gains. Like buy/sell within a year. That's fine I presume ... but since blockchain and this technology will be around much longer than that, and most likely integrated into everyday society, rather hold for the long long term. Gains would be massive.
But it's nice that cryptos are giving alternatives for countries like Zimbabwe / Venezuela where their economies and currencies have been crippled.
How do you interpret the fact, that there is no volume at the Zimbabwean exchange? That Bitcoin is not yet enough known? Or is it too difficult to access exchanges?
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It looks like a country has to suffer devaluation of there local currency before they adopt bitcoin and Britain does not have that problem. Thank you for the information
In any case I upvoted your post for the way you wrote it;)Nice article, I always like the way you write about stuff like this, a very own style. The news is a bit old already though as i wrote about it this exact phenomenon 5 days ago as well. Check it out if interested: https://steemit.com/bitcoin/@attalis/bitcoin-surges-to-usd7200-in-africa.
It's very heartening to see a market developed store of value like Bitcoin playing this role for people who otherwise would be worse off because of hyperinflation and poor government policy.
SOAR HIGHER
What goes up. It goes down.
Haha, that's actually exactly what I was thinking before I read that section of your post!
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Thats really promising for bitcoin future, i think other coins should do more marketing targeting Zimbabwe.
Inflation is a big problem. It looks like bitcoin has solved this problem.
Wow, that is a crazy price! Hope it gets that high at some point in the future!