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Week-long protests have erupted in violence in the streets of Chile, long considered a beacon of stability in an otherwise unstable region. And citizens of the South American nation have reportedly lost access to ATMs. Could Chileans follow in Hong Kong protestor’s footsteps and find refuge in Bitcoin?
The government of President Sebastian Piñera has responded with a heavy hand to what initially began as peaceful protests over a 4 percent hike to public-transportation fares. Student protests turned violent, and the government has responded in kind, essentially militarizing the country, which is now under a national state of emergency.
"We are in a new reality," Piñera said of his country over the weekend, according to the BBC. "Chile is different from what it was a week ago."
According to Chile’s National Institute for Human Rights, 20 Chileans have died so far during the protests, while another 1,100 have been injured and more than 3,200 arrested. The violence has also resulted in a number of banks being burned down, according to the Washington Post. Local Chilean outlet Diaro Financiero also reported that some 822 ATMs have been destroyed.
At the same time, Chilean citizens throughout the country have reported problems retrieving cash from the functional ATMs that remain, according to various news reports and first-hand accounts on social media.
It’s a scenario that is reminiscent of the turmoil recently experienced in Hong Kong. Earlier this month, protesters in Hong Kong called for massive cash withdrawals as a way of rebelling against China’s control over the region’s economy. During that time, Bitcoin trading in Hong Kong spiked significantly.
Likewise, in Argentina earlier this year, a panic across its markets following an unexpected result at its presidential polls coincided with an increase in Bitcoin trading, as well as a jump in the price of Bitcoin relative to the Argentine peso. Could a similar situation play out in Chile?
Although Chile is not a significant Bitcoin market, trading volume has been increasing steadily over the past two months. After hitting an annual low of 18 bitcoins per week in July, this figure doubled in mid-October, according to data from Coin Dance.
At the moment, however, both price and trading volumes for Bitcoin in Chile remain within standard ranges, showing no signs of unusual behavior. Bitcoin is currently trading for roughly $6.7 million Chilean pesos, which is about $9,370 USD. Increases in trading volume within Chile also remain consistent with the overall upturn in trading across the globe over the weekend.
As protests in Chile intensify, however, a spike in Bitcoin trading in the country would not come as a shock to most observers, given recent global trends.