Zimbabwe and their relationship with bitcoin

Zimbabwe and their relationship with bitcoin. It has been a turbulent week for the people of Zimbabwe as there has been a coup coordinated by the military to overthrow the long-standing leader Robert Mugabe. After this occurred, the costs of a single bitcoin topped out to nearly $13,500 which is almost two times what the international rate for a single bitcoin currently is.

Everyone is aware of the benefits of bitcoin and how it can help people in countries where there are a lot of issues with the fiat currency. Zimbabwe historically has had massive problems with their own currency, having experienced massive levels of hyperinflation in the past.

Bitcoin has been growing rapidly in terms of popularity in the country of Zimbabwe. While the growth rates do not match that of most of the other parts of the globe, there have been many encouraging signs as of late. They are in a similar situation to the majority of other African countries who are largely unexposed to the world of cryptocurrency and the many benefits that it offers.

Around the world, there has been a lot of hype in recent times about cryptocurrency and even countries that have failing economies there are a lot of people invested in the world of digital currency.

Ever since the financial crash in 2007/2008, people have been losing a lot of their trust in the banking system and other financial institutions. As digital currency and savings are kept safeguarded from inflation and political uncertainty, it is a great vehicle for a person’s wealth. Once they have access to secure peer to peer network, they are good to go.

For people in countries where the government cannot be trusted, bitcoin can be a saving grace. Currently, in Africa, there are more mobile phones than there are bank accounts and if you are using bitcoin, all you need is a phone.

In Zimbabwe, their sole cryptocurrency exchange has seen over $1 million worth of transactions over the past four weeks which is ten times what the 2016 turnover as for the entire year. While when compared to more developed economies this is just a small drop, in terms of Africa and Zimbabwe it is a big deal.

Zimbabwe has long had economic issues, with hyperinflation hitting up to 79.6 billion percent which led to the destruction of the Zimbabwean dollar back in 2009. There are many strict controls in place with currencies with US dollars being tightly protected and other currencies becoming almost worthless. Bitcoin can step in here where others cannot.

When there are times of crisis, people will turn to investing their money in assets that can help preserve their wealth, like gold for example. With the turmoil in Zimbabwe, demand has surged with supply suffering, leading to higher prices for these types of assets. In terms of bitcoin, the massive price surges in Zimbabwe are as a result of the low levels of liquidity in their bitcoin exchange which has led to prices rapidly rising.

It is hard to see much improvement in the Zimbabwe situation in the near future, so bitcoin could aid its people in order to prevent massive hardships economically.

 

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