Over the last few months as the cash crisis in Zimbabwe continues to persist the appetite for cryptocurrencies, Bitcoin included, has increased 4-fold. Zimbabwean cryptocurrency exchange Golix.io has announced that from its seemingly ambitious targets of wanting to process $1m worth of transactions in total historic value, that in the month of October 2017, the exchanged handled over $1m alone.
Taking this into perspective, the exchange processed a total of $100,000 the whole 2016!
Not only has the volume of transactions increased but the exchange has been offering a just-under-100% premium to what international exchanges offer for Bitcoin. This has been largely spurred by the introduction of the country’s own version of the US dollar – bond notes.
The exchange, that recently changed names from BitcoinFundi, announced that they are now profitable, operating with just 5 full-time employees. Yes, they are still hiring and looking to recruit talent.
Value Of Transactions
Golix further advises that they have been receiving a healthy amount of transactions over US$20,000, while at the time of writing there is someone wanting to get their hands on 3.22 BTC. Visiting the website often, as we do, one will notice that there has been an increase in the amount of both “buy’s” and “sell’s” on their order book.
Possible Reasons For BTC Demand In Zimbabwe
Getting money out of Zimbabwe has been a challenge for the last 6 months, as banks and financial institutions close (or restrict) avenues, with some reducing the amounts that one can transact, while others totally calling for customers to pre-fund their account with US dollars.
As Zimbabwe is a net-importer, we used to import just about everything, businesses are in need of ‘hard currency’ in order to re-stock their supplies and so turn to the ever-diminishing black market to enable them to continue to operate. The situation is not made any easier with banks announcing that they will not be issuing forex to non-exporters, even though the Reserve Bank of Zimbabwe has a ‘priority list‘ in place that determines who should be given forex first when there are limited amounts.
Adding to the demand has been students wanting to pay for their education as well as individuals wanting to buy personal items like cars.
This forces businesses and individuals to use alternative means to get money out the country and pay their suppliers.
Though not all suppliers take cryptocurrency as a means of payment, most Zimbabweans believe that as long as they convert their money into a form that is not losing value by the day (yes, Bitcoin does fluctuate and lose value, but recent events point towards it rushing towards $10,000/BTC by year-end). Those that buy Bitcoin will find it easier to move money out the country and will work on finding a way to convert it to fiat and pay for their product/service.
There is a possibility of a section of those buying Bitcoin wanting to preserve value as Zimbabwe speedily heads back on the road to 2008. As one’s money in the bank loses its purchasing power, people either buy goods (they have an expiry date) or store their money into something that will at least maintain its value as the road gets rough towards Zimbabwe’s 2018 election.
Have you transacted in Bitcoin in the last couple of months? What did you need to do with it that caused you to buy locally?