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Since the beginning of October, LocalBitcoins has seen its weekly Bitcoin trade volume practically fall off a cliff. With around $38.49 million in BTC traded through the platform in the last week, LocalBitcoins is now at its lowest weekly trade volume (when measured in US dollars) since September 2018—falling by more than a third in under a month.
Looking at the number of bitcoins changing hands on the platform each week, the figures are even lower. In total, just 4,595 BTC changed hands on LocalBitcoins last week, which is the lowest value since June 2013—a year after LocalBitcoins was first launched. This compares to 5,344 the month before, showing a drop of 13 percent.
Much of this reduced volume appears to be a result of reduced activity in Eastern Europe and Sub-Saharan Africa, with both regions witnessing between a 35-40 percent drop in trade volume since September. Besides this, although the Asia-Pacific region only constitutes a small percentage of LocalBitcoins trade volume, the region has seen the most dramatic month to month change in volume—falling by more than 40 percent since last month.
LocalBitcoins was recently found to be most commonly used in countries with low economic freedom and high levels of corruption. Across the more than 200 countries served by the platform, the greatest volume increases have been seen in countries like Russia, Nigeria, Venezuela, and Colombia—which have a disproportionately high volume despite having a relatively low population size or GDP. Speculators claim that Bitcoin is being used as a hedge against high levels of inflation in those countries.
However, this use-case hasn't been enough for LocalBitcoins to avoid a general market slump. Across the board, trading volumes on crypto exchanges are falling, with data from Messari (which tracks 10 reputable exchanges) showing that Bitcoin's trading volume has fallen from $4 billion a few months ago to $200 million, as pointed out by eToro market analyst Mati Greenspan. This comes as the price of Bitcoin has fallen from $10,000 to its current value of $8,044.