- Venezuela is LocalBitcoins' second-biggest market, while Colombia has jumped to the #3 spot.
- Thanks to faltering economies, both countries, plus Argentina, are near the top of Bloomberg's 2020 Misery Index.
- Citizens appear to be using Bitcoin as a store of value.
Two Latin American countries have positioned themselves in the top three for Bitcoin trading on LocalBitcoins—the most prominent peer-to-peer (P2P) trading platform for cryptocurrency.
According to a post from the educational group "Satoshi en Venezuela" published by LocalBitcoins, Venezuela has maintained its position as the second-largest Bitcoin trader in the world, accounting for 12.3% of all trade volume worldwide in 2020. The socialist nation is only surpassed by Russia (17.4%), according to data published by LocalBitcoins and confirmed by Decrypt via crypto data site Useful Tulips.
But a new player is entering the scene: Colombia.
Venezuela's neighbor nation took over third place after moving 11.3% of all Bitcoins traded on LocalBitcoins. The country also leads the Bitcoin ATM market in Latin America with 60 ATMs installed, providing some evidence that interest in cryptocurrencies is growing as fast as token prices.
With 23% of LocalBitcoins’ total market, the two Latin American countries beat the trading frequency registered by Sub-Saharan Africa, a region with a booming volume on the rival Paxful platform.
The reasons seem to be predominantly geopolitical and financial. Referring to Venezuela, the post states, "Hyperinflation in the country has led the exchange volume of Bitcoin to rise considerably in the country. This also influences the volume in its neighboring country, Colombia.”
Besides Colombia and Venezuela, other economies that play a relevant role in the Latin American market are Argentina, Chile, and Brazil. Using Bitcoin as a mid-pandemic store of value seems to be a primary cause of these markets’ recent shift towards crypto economics.
During the government of Mauricio Macri, which ended in December 2019, Argentina sunk to an economic low, hitting the #2 position on Bloomberg’s 2020 Misery Index, right behind Venezuela and three spots ahead of Colombia.