Coronavirus tracked: Bitcoin trading in South America sky rockets as cases surge
'The impact that Covid-19 has had on the cryptocurrency industry is huge,' analyst says
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Bitcoin trading has risen significantly in several South American countries currently experiencing a surge in new coronavirus cases, a study has revealed.
Countries including Argentina, Chile and Colombia bucked a trend that saw the volume of bitcoin trading drop globally between 2019 and 2020.
Cryptocurrency trades on the LocalBitcoins platform fell by more than a third in total – falling from £537 million to £337m – but rose in volume by nearly a quarter in Chile and more than doubled in Argentina.
Data gathered by investment publication Invezz revealed the dramatic impact the coronavirus has had on bitcoin trading. The anomalous figures from South America may be due to the pandemic's effect on already volatile economies, according to Invezz’s David Merry.
“The impact that Covid-19 has had on the industry is huge, the numbers speak for themselves,” he said.
"Many countries such as Russia and China are down as much as half when compared to last year. However, Covid-19 has also further exacerbated existing geopolitical issues within South America, and this may well have caused an interesting spike in bitcoin trading activity.
"This trend is only further likely to continue, with many Latin American countries such as Venezuela, now adopting cryptocurrency to help alleviate the issues of hyperinflation."
Venezuela actually saw a slight drop in bitcoin trading, however its already high volumes means it is now second only to Russia in terms of trading volume.
The country's economy has been in free-fall for several years, made worse by crippling economic sanctions imposed by the UK and US.
Venezuela's inflation rate hit 10 million per cent in 2019, prompting many people to turn to cryptocurrencies as a more stable medium of exchange.
Since 1 June, 2020, an estimated 20,000 shops and businesses in the country now accept payments via bitcoin and other cryptocurrency.
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