Bitcoin (BTC), the leading cryptocurrency, reached a high in Zimbabwe today as more people look to convert their bank balances to “real money” as well as getting their money out the country.
Today, Monday 25 September 2017, on BitcoinFundi, the local Zimbabwean cryptocurrency exchange BTC traded for as much as $7,200/BTC translating to an 85% premium based on the Coinbase price of $3,900.
Techzim is not sure whether this is the highest that the cryptocurrency has traded, as neither Techzim nor anyone has openly kept records, tracking the local rate of BTC.
A number of factors could be driving the demand for the digital currency, hence a premium that is almost double what the RTGS/transfer rate is said to be trading at.
This comes at a time when Zimbabweans are having flash-backs of 2008, a period when Zimbabwe reached hyperinflation coupled with queues for almost everything and shop shelves that were devoid of everything. Shoppers were seen stocking up on groceries, in fear of basic commodities disappearing from shelves based on messages circulating warning of the same.
The Minister of Home Affairs had to step in to warn people to desist from sharing such alarmist messages, thus causing panic buying.
Currently, banks are prioritising processing of telegraphic transfers based on the Reserve Bank of Zimbabwe’s ‘priority list‘, while Visa/Mastercard payments are also being controlled or culled altogether. thus making it difficult for individuals and cooperates alike to make external payments. Zimbabwe is a net importer, with a trade deficit of over $1.2 billion, thus translating to the appetite for forex being high and importers are forced to look into options like BTC to get their funds out the country.
Another factor is our huge thirst for ex-Japanese vehicles and a number of people turning to bitcoin in order to make payments to car sellers such as BeForward of Japan. As ‘hard currency’ disappears from the street
As ‘hard currency’ disappears from the street, the demand for alternative payment options such as bitcoin will but increase, resulting in the rate increasing further.
Those that are using BTC as a means of sending money back to Zimbabwe will be excited with this rate, not only smiling all the way to the bank but back from it too…
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Bitcoin price on Bitfundi is loosely following the OMIR. However because the order book is very thin it can go out of sync with the OMIR by +/-10%. Though an interesting observation is that during quiet periods minuscule transactions of $2 or less are run on bid or ask side with what I perceive as an attempt to initiate price action as following transactions usually take that price. It’s not exactly spoofing but has a similar result. The spread is ridiculous due to the lack of depth of the order book. Bitfundi would be best advised to increase liquidity in order to make their platform attractive.
We are laymen to this animal, can you please simply and advice
Hello, I have written an article on that. Its titled Bitcoin for dummies. You can read it here https://www.linkedin.com/pulse/bitcoin-dummies-ndasanganisa-nekashona-kuti-zvirinani-chiyangwa/?published=t
You are definitely right about the attempts to initiate price action. Since this article was published, the price dropped to an approximately 20% to 30% premium (currently ~$4700 in zim compared to $3900 in USA) on five or ten times the typical daily volume, with unusually high volatility.
This is in line with the premium Bitcoin usually attracts in other African markets. However, I don’t expect the price to stay here due to the ~40% premium in Zimbabwe for hard cash (which is essentially what Bitcoin is), combined with the 20% “Africa premium.” Actually, the 85% premium that was hit before this article was published (albiet on very thin volume) seems more in line with what could be considered a “fair” price for Bitcoin in Zimbabwe. Slightly high, perhaps, but not too far off the mark. That’s just my take though.
Indeed, the sudden spike in volume today leads me to suspect that a larger market maker is moving into Fundi. Let’s see if this sees increased volume translates into a more stable price with higher liquidity.
Regarding the delays on withdrawals, I consider this a security feature. With Fundi being such a small and leanly staffed bitcoin exchange, I am very happy that someone has to manually authorize withdrawals. It sucks from a convenience standpoint though, I’ll admit that.
Hi William,
There definitely is a new market maker who has brought life to the order book. Well done to Bitcoinfundi! The prices have come down from the record high of Monday but the spread is still ridiculous. This market maker is going to make a killing! Lets see how the market will take this new exciting development. I think more coverage from Techzim and others will ultimately help BitcoinFundi and the public who choose to hedge the bondnotes into Bitcoin but AT THEIR OWN RISK.
I hope Techzim do a follow article on these developments in the not so near future.
Also note that getting bitcoins out of Bitfundi is not as straightforward as they make it out. I have been waiting since Sunday for an “instantaneous” transaction to be processed, which makes me very alarmed.
I always face the same problem. They are very slow to process. BTC withdrawals don’t take more than 30mins on other exchanges. Makes one worry about solvency
I consider this a security feature though it sucks in terms of convenience. Withdrawals are especially slow on weekends. But as a small new exchange which may not have big bucks for an automated system and exhaustive security audits, I am very happy that an actual person processes withdrawals.
That said, it would be great if you posted when your withdrawal finally went through though, because that would increase accountability.
It’s now 3 days later, and the transfer has not gone through. Nor are support responding to emails. This isn’t a security feature, its downright incompetence, or worse, theft. Extremely disappointing.
Okay, transaction processed. They will have to work on these delays, tempers can flare easily in Zimbabwe when access to ones assets seems in doubt.
Gentlemen, BitCoin exists solely in the online world, so don’t get trapped in this “local” rate mentality. If BitCoin is cheaper on another exchange, make a plan and buy it on that exchange. There’s nothing that binds you to buying BitCoin from a “local” exchange. Although, it might be inconvenient, with a bit of financial creativity the 85% premium can be halved, or even zero’ed depending on who you bank with.
How do you buy it from another exchange when you are in Zim? Payment methods that facilitate international transactions are barred in Zim.
Get a USD prepaid debit card from banks that are taking deposits for those cards and purchase from international banks exchanges. Works out slightly cheaper than local option.
which banks are these exactly and are they local banks?
Don’t be quick to assume what happens at your bank is the status quo at every other bank. As a matter of fact, on the 20th September I used my Zimbabwean account to buy goods online from a South African shop using existing money already in the account. No USD pre-funding required. Even if your bank doesn’t allow international transactions, I’m sure you could find someone whose bank does. I don’t think they would charge you 85% for their services. That’s why I said, “make a plan” and be “financially creative”. Things are tough, yes, but be smart, don’t just follow others blindly.
You need a VPN virtual private network. Or look in Substratum.net. They will be launching a decentralized hosting service in late 2017 or early 2018.
Does this imply you are unable to move USD from a Zim bank anywhere outside the country?
You can read this article to understand the risks associated with bitcoins
http://ri.co.zw/2017/09/26/how-safe-is-bitcoin/
@ William
Your article was picked up by Cointelegraph.
https://cointelegraph.com/news/bitcoin-trading-at-85-premium-in-zimbabwe-priced-at-7200
Kepp up the good work guys!
Zimbabwe moving to cryptocurrencies is a very good thing. If we take back control of our money system as the average zimbos, the government will be forced to deliver services otherwise they simply won’t be paid tax by the people and they will never have a way to “force” people to pay these taxes.
If you’re recieving remittances through bitcoin, spread the word, everyone needs to know to access the value of their money instead of giving it to moneygram. I have made a personal obligation to mine as much crytpocurrency as I can, simply because it’s a good store of value for me and it can’t be eroded by bond coins. The movement has begun and Zimbabweans have beginning taking control of the thing that is most important to their success – their money.
i want to start trading bitcoin in Zimbabwe , how do i go about it, i am a Nigerian, how possible is it, can i get directions?
i want to start trading bitcoin in Zimbabwe , how do i go about it, i am a Nigerian, how possible is it, can i get directions?
Which platforms can i trade in??
Why pay almost 10‘000 usd per bitcoin at golix? Just contact me and get it way cheaper! Best prices guaranteed! Regards, Lukas
bodmer@mail.com