Inflation Strikes Hard In Venezuela – Bitcoin Offers A Way Out

Some people still keep stating how there is nothing wrong with the financial ecosystem we live in today, and to an extent, they are probably right. However, simply because certain issues do not affect one directly, that does not mean everything is working as intended. People in Venezuela will gladly tell you how they are in dire need of financial change, as the country is facing over 700% of inflation throughout 2016.

Also read: This Week’s Bitcoin Price Synopsis

Venezuelan Bolivar Reaches New Inflation Record

TheMerkle_Venezuelan Financial Crisis

Whenever a country is facing inflation, things are not looking good for the people living there. Inflation will inadvertently lead to major price increases for goods and services. Not because the base price of things is going up, but simply because the local currency is rapidly declining in value. That loss will have to be recouped somewhere, and unfortunately, it will be paid for by everyday consumers.

That being said, a 720% inflation, as announced by the IMF, is not something that occurs all that often. While it is not the first time Venezuela is greeted with heavy inflation – 275% last year was a strong indication of things to come – the continuing decline of the local currency in value is a major reason for concern.

Comparing the projects by the International Monetary Fund with the numbers provided by the Venezuelan government, things are not adding up. The government mentioned how the inflation rates for the country stood at 141.5% through to September 2015, which is a major difference compared to 275%. Then again, both numbers should be taken with a grain of salt, and it is impossible to say what the actual inflation rate is right now.

Finding a reason for this massive threat to the Venezuelan economy is not all that difficult. Most of the blame can be put on economic mismanagement by those in a seat of power. Furthermore, basic goods like toilet paper and milk are already in short supply, thanks to the dwindling value of the local currency. This is inflation at its finest, ladies and gentlemen.

Additionally, the Venezuelan central bank is printing money like that is no tomorrow, pushing the value of the bolivar down even further. Just a year ago, a black market exchange from Bolivar to US Dollar would cost 200 Bolivar, whereas the rates have skyrocketed to 800 or more at the time of publication.

Bitcoin Is A Solution

TheMerkle_Venezuelan Financial Crisis Bitcoin

Unlike the financial world, as we know it, there is an alternative financial ecosystem available to people that operates outside of central banks. Bitcoin is a global digital currency that is not controlled by governments or banks anywhere in the world, yet still manages to provide financial services to both the banked and unbanked people of the world.

Obtaining Bitcoin can be done in a variety of ways, ranging from using Bitcoin exchanges to buying it from the black market and even finding local traders. There is no reason not to get involved in Bitcoin at a time of financial crisis, as this form of finance is the only viable option to retain some financial wealth in the future.

Source: FT

Images credit 1,2,3

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  • Mohammad M. Mohammad

    Venezualins are not able to use Bitcoin. They have special challenges.

    • Mike

      Such as?

  • E-Coin

    We recommend getting a virtual e-coin card so you can use your bitcoin to purchase items online. Bitcoin is an escape and services like E-Coin allow you to use it for practical everyday purchases.