1/ The sheer amount of misinformation regarding the situation in Venezuela made the choice of research topic for this week’s @DiarNewsletter easy. Showing volumes in Venezuelan bolívar, one of the fastest inflating currencies ever? Really? diar.co/volume-2-issue… 
2/ The tweet by @alextapscott got retweeted 210 times and it’s as misleading as it gets.
3/ Many were quick to reply with the BTC volumes, which is way better but still not accurate over the long term because of Bitcoin’s price fluctuations. 200BTC in 2013 isn’t the same as 200BTC now.
4/ If you want to get an accurate measure of @LocalBitcoins volumes over the long term, you have to look at USD volumes (I know I’m a filthy statist, sue me). Unfortunately, LocalBitcoins doesn’t provide USD denominated data. Fortunately Diar did all the work for you.
5/ The volumes denominated in USD graphed with the inflation rate paint a very clear picture. In November 2016 when the national currency first became hyperinflationary, the weekly volume on LocalBitcoins grew from $230,000 to about $3.1Mn today (1250% increase).
6/ Inflation in Venezuela is currently approximated to be 200,000% and IMF forecasted it could hit 1,000,000% by year-end. One fucking million… Close to the inflation seen in Germany during the 1920’s and Zimbabwe in the 2000’s.
7/ The new currency supposedly backed by Petro (lol) erased 5 zeros from the old bills, has already seen an inflation rate of 100% in just three weeks. Venezuela already has heavy capital controls, which is why BTC volumes have averaged a 19% increase month-on-month since 2016.
8/ While Venezuela has been experiencing the highest inflation levels, it is far from the only country dealing with the same phenomenon. Argentina, Egypt and Iran have all experienced inflation north of 30% in the past 5 years.
9/ Turkey has also been battling increasing inflation for the past two years. Inflation increased from 6% in April 2016 to nearly 18% today. However, despite the short bursts of interest, LocalBitcoins volumes have continued to slide. Perhaps because trading is legal in Turkey.
10/ Other inflationary countries such as Egypt and Iran don’t have the same luxury. Iran has outright banned bitcoin, which is severely limiting its citizens’ exposure to it. Yet the weekly volumes hit $1.5M in December.
11/ Egypt’s financial regulator said in December that Bitcoin trading is illegal in the country. Egypt’s Islamic legislator said that bitcoin is prohibited under Islamic law.
12/ While Bitcoin has been a valuable inflation hedge in countries with unpredictable monetary policy, Venezuela is the first country where there is a considerable growth in traded volumes with the increased inflation. This suggests that bitcoin is actually helping people there.
13/ Backlash fears from authoritarian states, notoriously known from weak currencies, might pose a challenge to the onboarding of new adopters.
